On April 7, 2025, the cryptocurrency industry faced a tumultuous day, now dubbed "Black Monday" due to a significant market downturn. Over the weekend, more than $1 billion in long and short positions were liquidated, leading to a wave of pessimism among traders and investors alike.
On Saturday, April 5, data from Coinglass revealed that $116.59 million in positions were liquidated, with $33.02 million in short positions and a staggering $83.57 million in long positions. The following day saw an escalation in liquidations, with the total surpassing $850 million. Of this amount, $743.115 million came from long positions, while $107.881 million was from short positions. In total, over the last 24 hours, 320,444 traders were liquidated, culminating in an astonishing $985.82 million in liquidations.
This unprecedented liquidation volume has fueled widespread fear within the crypto market, as the total market value of cryptocurrencies plummeted by more than 10%, settling at $2.5 trillion. Among the top ten cryptocurrencies, XRP led the decline with a drop of over 15.4%, trading at $1.70 at the time of writing. Ethereum also suffered, falling 14.3% to $1,480.
Analysts on X (formerly Twitter) have drawn parallels to historical market crashes, with one remarking, "April 7 is shaping up to be Black Monday 2.0." This reference calls back to the infamous stock market crash of October 19, 1987, when global stock indices collapsed, with the Dow Jones Industrial Average experiencing its largest single-day percentage drop in history.
In the wake of these events, Google Trends indicated that global searches for "Black Monday" have reached peak levels, reflecting the heightened anxiety among investors. The Kobeissi Letter noted, "The bearish sentiment is undoubtedly at its highest in history," further emphasizing the current market climate.
As the week unfolds, analysts are scrutinizing the underlying causes of this crypto downturn. The Kobeissi Letter attributed the pessimism to uncertainty surrounding proposed tariffs, suggesting that the day has become a consensus view among market watchers. They predict a "short-term capitulation" this week, stating, "Down and then up," hinting at a volatile market that may ultimately recover.
According to the AAII Sentiment Survey, a striking bearish outlook of 61.9% was reported, which is double the historical average of 31.0%. This reflects a market gripped by fear, with many investors bracing for further declines.
Analyst Duo Nine warned that tariffs imposed by former President Donald Trump could dismantle global supply chains, reduce productivity, and usher in a prolonged bear market for cryptocurrencies lasting one to two years. He stated, "If the U.S. does not reverse course soon, then the only conclusion is that this is intentional, and the damage will only increase over time. Unfortunately for crypto, this means the beginning of a prolonged bear market. It could last 1-2 years or more if a global recession begins."
However, amid these fears, some contrarian investors view the extreme pessimism as a buying opportunity. This perspective is based on the assumption that when such dire forecasts become commonplace, the market bottom may be near, potentially offering chances for profit amid the panic.
Not everyone shares the apocalyptic view, though. Ryan Wollner, founder of Pearpop, urged caution against exaggerated narratives on X, dismissing comparisons to the 1987 crash. He suggested that the current market may only be undergoing a temporary transition of 2-3 weeks, after which buying interest could return as tariffs become better understood. He added, "Traders could profit by selling now and buying soon at lower prices," highlighting a potential strategy for savvy investors.
As for Bitcoin, it fell nearly 8% in the last 24 hours, trading at $77,030 at the time of publication. Analysts expect continued volatility in the coming weeks, with the market split between those anticipating a final shakeout before a rebound and those fearing the onset of a deeper collapse.
In related news, on April 3, Bitcoin was quoted at R$ 475,522.21, having suffered an 8% drop to $76,000. The market's bloodbath saw 423,830 traders liquidated, totaling $1.30 billion in liquidations. The S&P 500 E-mini fell 4.3%, while the Dow Jones and Nasdaq 100 dropped 4% and 4.6%, respectively. The volatility has been attributed to Trump's newly announced tariffs, which have ignited fears of a global trade war, economic slowdown, and a potential recession in the United States.
Mike Ermolaev, founder of Outset PR, remarked, "We are experiencing widespread panic. And when this happens, it’s hard to know how deep we will go." He noted that Bitcoin had broken the support level of $78,000, opening the door for a potential correction down to $70,000 in the coming days. Ethereum fell below $1,700 for the first time since Q3 2023, while Solana and Avalanche also faced significant declines.
As the global markets prepare for turbulence, opinions remain divided between impending doom and opportunistic recovery. The Fear and Greed Index has plunged to an alarming 4/100, the lowest level ever recorded, reflecting extreme fear among investors. In contrast, the Cryptocurrency Fear and Greed Index stands at 23/100 on April 7, indicating a less severe but still cautious sentiment.
Despite the turmoil, some analysts are cautiously suggesting that now may be the time to "buy the dip," arguing that while the absolute bottom may not be reached, it often presents at least a local opportunity. Charles Edwards, founder of Capriole Investments, noted, "If you think about the medium to long term, this is the type of moment worth buying. In 12 or 24 months, you’ll thank yourself."
As the cryptocurrency market continues to grapple with these challenges, Bitcoin's price on April 7, 2025, stands at R$ 450,086.44, with significant fluctuations expected in the days ahead. The market remains on edge as investors await further developments.
