The crypto market lost $140 billion in just a few hours after a major announcement on April 2. Investors were watching closely as President Donald Trump introduced reciprocal tariffs, which caused sudden changes in many markets. Before the announcement, Bitcoin (BTC) went above $87,000. But soon after, it fell fast and reached $83,662 by the next day. Other digital assets followed the same pattern.
The total market capitalization for cryptocurrencies jumped to $2.77 trillion during the day. That was an increase of more than $50 billion. But the rise didn’t last. When the tariffs were made public, the market dropped sharply. In less than four hours, the total value fell to $2.61 trillion. Even though there was a small bounce on April 3, the market only recovered slightly. The final loss was $140 billion, based on data from TradingView.
This event showed that digital assets like Bitcoin are still very sensitive to world events. Many investors once thought Bitcoin would act like digital gold and hold value during uncertain times. But this drop showed it behaves more like tech stocks. It reacts quickly to news and shifts in risk. The stock market also dropped after the tariffs were announced. By the next morning, most big companies’ shares had fallen by at least 3%.
While Bitcoin and stocks dropped, gold prices went up. Gold reached over $3,162 during a four-hour rally. Gold has long been seen as a safe haven asset. This means that during risky times, investors often move money into gold to protect their wealth. By the time markets started to recover slightly, gold had settled back to $3,128. The movement showed that many investors trust gold more than digital assets when fear spreads.
Bitcoin has been very unstable in recent months. On April 3, it traded at $85,215, which was a 2.2% increase in one day. But even with that gain, it’s still down more than 21% from its all-time high of $109,000 in January. These price swings show how unpredictable Bitcoin can be. Traders and analysts are watching closely to see if this means a bigger rally is coming or if the price will keep falling.
CryptoQuant, a blockchain analytics company, has shared some interesting data. One of its contributors, known as Onchained, studied the behavior of short-term Bitcoin holders. These are people who bought Bitcoin one to three months ago. In past crashes, this group often sold quickly to avoid bigger losses. But this time, many are holding on. They are not selling at a loss like before.
This change may be important. Onchained looked at a metric called Short-Term Holder Net Realized PNL to Exchanges, or CEXs. This tool shows who is selling Bitcoin, whether they are making or losing money, and how strong the selling pressure is. The data suggests that while some short-term holders are selling, most are not doing so at a loss. This shows a change in how people react during dips.
The reduced selling could mean that the market is finding a bottom. In other words, prices may not fall much more. In past cycles, when short-term holders stopped selling at a loss, it often signaled the start of a recovery. If this pattern repeats, Bitcoin could soon rise again. The selling pressure has eased, and this often leads to a new upward trend.
About 28% of Bitcoin’s supply is now held by short-term investors. If these coins shift into the hands of long-term holders, it could help push the price even higher. Some analysts believe that if this happens, Bitcoin could go above $150,000 in the near future. But the market is still fragile and very reactive to outside news, like new tariffs or stock market changes.
This crash showed that external shocks affect digital assets more than many believed. The crypto market used to be seen as separate from traditional finance. But now, it moves closely with stocks and other risk assets. When one falls, the other often follows. This high correlation makes it hard for investors to use Bitcoin as a safe store of value.
Gold, on the other hand, has stayed strong. It acts as a safe haven during times of trouble. As cryptocurrencies dropped, gold rose, proving once again that it remains a trusted choice. Many investors may continue to turn to gold when they want to avoid risk. This adds to the idea that digital gold is still far from replacing the real thing.
Even though Bitcoin has dropped a lot since January, some signs suggest a bottom is forming. The slowdown in panic selling, the behavior of short-term holders, and the easing of losses point to possible recovery. But traders must stay cautious. The market could still react to news about tariffs, inflation, or interest rates.
The crypto market has become more connected to global events than ever before. This makes it important for investors to watch both financial and political news. Movements in the stock market, interest rate changes, or trade policies can all affect digital assets. This was clear on Liberation Day, when one announcement wiped out billions in value in just hours.
For now, Bitcoin remains a risky but closely watched asset. Its sharp fall and signs of recovery show how quickly things can change. If short-term holders keep their coins and selling pressure stays low, we may see prices rise again. Still, gold remains the true safe haven, while Bitcoin keeps acting more like a tech stock. As the market shifts, keeping an eye on sentiment, short-term behavior, and key metrics will be essential.
The $140 billion crypto market drop is a reminder that no investment is free from risk. It also shows that while Bitcoin is popular, it is still deeply connected to the world around it. Investors hoping for stability must look beyond the hype and pay attention to the data. Whether Bitcoin recovers or continues to fall will depend on how people respond to pressure—and whether they choose to hold or sell when times get tough.
