Bitcoin (BTC) started the week on a bearish note, slipping 2% in the past 24 hours, according to CoinDesk Indices data. The decline weighed on the broader crypto market, with major altcoins such as Solana (SOL), Cardano (ADA), XRP, and Dogecoin (DOGE) tumbling as much as 5%. Meanwhile, BNB Chain’s (BNB) stood out as the only major asset in the green, climbing 3%.
BTC tested resistance at $84,000 on Sunday but failed to break through, leaving it trading just above $83,300 as of Monday afternoon in Asia. Analysts suggest this level remains crucial for any potential upside movement.
Market Reacts to Macroeconomic Uncertainty
The recent pullback follows last week’s turbulence driven by escalating U.S. tariffs and concerns over macroeconomic instability. Some traders believe fears of a U.S. recession, exacerbated by former President Donald Trump’s tariff policies, are contributing to ongoing market uncertainty.
Despite the market’s current stagnation, some investors see opportunities in altcoins and memecoins.
- Altcoin momentum: Trading volume in alternative assets surged after Trump’s World Liberty Financial acquired Mantle (MNT) and Avalanche (AVAX).
- ETF-linked shifts: VanEck’s ETF application for AVAX has drawn increased interest.
Nick Ruck, director at LVRG Research, noted, “This could signal a shift in investor focus toward altcoins as traders seek higher returns outside of Bitcoin and Ethereum.”
ETF Unwind and Multi-Strat Strategies Weigh on Bitcoin
Some experts attribute the sell-off to a wave of ETF-related unwinding and multi-strategy (multi-strat) hedge fund activity.
- Basis trade pressures: Many funds engage in basis trades, buying spot BTC—often through ETFs—while shorting BTC futures to profit from the price spread.
- Tighter spreads impact exits: As spreads tighten or market conditions shift, funds exit positions, leading to broad liquidations.
- Tariff-induced volatility: The recent macroeconomic turbulence has accelerated this process, adding to Bitcoin’s selling pressure.
Augustine Fan, Head of Insights at SignalPlus, explained, “This sell-off is largely driven by multi-strat hedge fund strategies that dominate macro trading. Basis trade liquidations have amplified the decline amid tariff-related volatility.”
Despite these short-term headwinds, bullish sentiment remains intact. Fan added, “Market consensus sees this as a ‘buy the dip’ opportunity, given that equity valuations outside large caps remain stable relative to historical averages.
