Trump's Duties or Weak Demand: What Caused the Collapse of the Crypto Market

• On April 6-7, the crypto market faced a significant collapse.
• Most crypto-assets plummeted in value. Bitcoin dipped below $75,000, Ethereum below $1,500.
• This led to the liquidation of futures positions worth more than $1.36 billion.
• The Coinpaper editorial staff gathered experts' opinions on the reasons for the sharp collapse and their predictions for the future.

Between April 6 and April 7, 2025, the cryptocurrency market suffered a sharp decline. Bitcoin collapsed by more than 10% overnight to below $75,000. Ethereum fell to $1500, hitting lows since March 2023. This led to liquidation of over 441,800 traders' futures positions worth $1.36 billion.

On April 2, 2025, US President Donald Trump introduced a large package of customs tariffs, including reciprocal and base tariffs. Most experts cited this as the main reason for the collapse of the cryptocurrency market.

Coinpaper team analyzed the comments of experts and collected their opinions on the current state of the crypto market and its future.

Reasons for the correction

Bitget Research chief analyst Ryan Lee said in a commentary that bitcoin and Ethereum have entered a critical phase of price consolidation amid heightened macroeconomic tensions. According to him, the market has become more volatile following Trump's statements on new tariffs and concerns over a possible trade war.

In addition, Ryan Lee added that the strengthening of the US dollar and rising Treasury bond yields also contributed to the fall in the price of the first cryptocurrency.

Peter Chang, head of research at Presto Research, noted in a commentary on The Block that bitcoin investors have been gripped by a ”sell now, think later” mindset due to the pace and scope of Trump's imposition of new tariffs.

He said the market's recovery will depend on three factors: the reaction of other countries, the Trump administration's ability to develop a long-term plan, and expected actions by the U.S. Federal Reserve (Fed) to address the current instability.

Jeff May, chief operating officer of cryptocurrency exchange BTSE, explained that cryptocurrency markets historically precede stock markets over the weekend. The collapse of Asian markets on the morning of April 7 likely confirmed this observation, he said.

Matrixport experts said that the probability of correction of the first cryptocurrency to the $73,392 mark is growing. They added that the support level at $87,000 remains an important barrier, especially after Trump's announcement of new duties.

In addition, analysts noted that additional pressure is created by the restraint of U.S. consumers due to inflation, as well as the statement of Fed Chairman Jerome Powell that the regulator does not plan to change its policy yet. This may delay the positive impact on bitcoin from monetary support, Matrixport believes.

Back on April 5, CryptoQuant CEO Ki Yang Ju said that bitcoin's bull cycle has already ended due to the asset's weak price response to the influx of large amounts of capital.

The expert referred to an indicator that reflects the actual amount of money that has entered the network. If it rises and the market capitalization stands still or declines, it indicates that investors are buying bitcoin but the price is not responding - a typical signal of a weak market, Yang Ju explained.

According to him, even small purchases with low selling pressure can significantly raise the price of an asset. But now the opposite is observed - despite significant capital injections, the price almost does not grow due to high pressure from sellers. Such conditions are characteristic of a bear market, CryptoQuant CEO noted.

Expert forecasts and the market situation

Block CEO Jack Dorsey said that bitcoin will fail unless it becomes a convenient payment instrument. According to him, the first cryptocurrency must be a daily means of payment, otherwise it will ”turn into something you buy and forget until the next crisis.”

He added that without active use in payments, cryptocurrency will lose relevance. The expert also called for simple payment solutions that are fast, secure and private.

Investor, businessman and author of the bestseller ”Rich Dad, Poor Dad” Robert Kiyosaki said that the biggest stock market crash has already begun and could turn into a depression.

In his opinion, after the collapse of ”paper assets,” the authorities will turn on the printing press again, devaluing the dollar. In such circumstances, he advises to pay attention to gold, silver and bitcoin.

Blogger Miles Deutscher stated that it is possible to make money in the cryptocurrency sector only 10% of the time. 90% of the time, the market is either stagnant or falling - that's when you need to be patient.

Andrew Kang, co-founder of venture capital firm Mechanism Capital, predicted Ethereum to fall into the $1000-1500 range this year.

A trader and analyst under the pseudonym DaanCrypto said bitcoin volatility is declining, while the VIX volatility index for stocks closed at its highest level since the crash in 2020.

DWF Labs CEO Andrei Grachev said that if countries offer zero-tariff deals to the U.S. and the Fed lowers interest rates, stocks and cryptocurrencies will rally.

If the Fed starts printing money, bitcoin could hit an all-time high, Grachev said, adding that all will become clear in the coming weeks.

According to Ryan Lee, bitcoin may remain stable near the $70,000 mark as the cost of mining 1 BTC varies between $60,000-$65,000.

He summarized that further market dynamics will depend on how investors interpret policy and liquidity changes in the coming weeks.

Arthur Hayes, investment director at venture capital firm Maelstrom and co-founder of the BitMEX exchange, said he has been buying bitcoin all day and plans to continue.

According to him, it is not worth buying altcoins yet, as the bitcoin dominance rate is likely to grow to 70%. The expert also urged to remember the possibility of launching a printing press.

Parallels to the historic crash

Analysts on social network X are actively discussing the possibility of a repeat of a historic crash comparable to Black Monday.

”Tomorrow [April 7] could be Black Monday 2.0,” announced a Maine analyst.

”Black Monday” refers to the sudden stock market crash that occurred on Oct. 19, 1987. On that day, major stock indices around the world collapsed sharply, and the Dow Jones Industrial Average in the U.S. fell by 22.6%, which was the largest daily drop in history.

Panic erupted in the backdrop as trading volumes overwhelmed the markets. The lack of trading halt mechanisms in the face of extreme volatility allowed the freefall to continue unimpeded.

Following the mass liquidations, Google Trends shows that global searches for the phrase ”Black Monday” peaked.

What's behind the drop

”Bearish sentiment is at its highest level in history,” noted analyst The Kobeissi Letter.

He attributed the gloomy sentiment to uncertainty over Trump's trade war, describing ”Black Monday” as the consensus view. Based on this, the analyst predicts a ”short-term capitulation” this week.

The Kobeissi Letter cites the results of the AAII Sentiment Survey, which recorded a record 61.9% bearish outlook. Notably, this is double the average of 31.0%.

Duo Nine analyst supports this assessment of what is happening in the market. He warns that Trump's tariffs could disrupt global supply chains, lower WFP and lead to a recession.

”If the US doesn't change course soon, the only conclusion is that this was done deliberately and the damage will only escalate over time. Unfortunately for cryptocurrencies, this means the start of a prolonged bear market. It could last 1-2 years or longer if a global recession starts,” Duo Nine explained.

An alternative view

However, everyone agrees on the apocalyptic tone. Ryan Wollner, founder of Pearpop, urged not to exaggerate the danger of what is happening and rejected comparisons to the 1987 crash.