The crypto market experienced a brutal selloff over the past 48 hours, with Monday’s plunge marking one of the most intense capitulation events in recent memory. Leveraged long positions across altcoins—especially those above 5x—were almost entirely wiped out. Even seasoned investors weren’t spared. While I had reduced exposure slightly ahead of the drop, my core spot holdings still took a significant hit. At least I’m still in the game—more than can be said for many who overleveraged.
So, the big question on everyone’s mind: Has the bull market ended?
Market sentiment has turned sharply bearish. FUD (fear, uncertainty, doubt) is spreading fast. Yet, opinions remain divided.
Bullish voices argue that the aggressive liquidation of leveraged positions has "cleansed" the market, reducing excess risk and setting the stage for a healthier rebound. Bearish analysts counter that aside from Bitcoin (BTC), most of the market—including Ethereum (ETH)—has already entered a bear phase, with altcoins consistently making lower lows.
Let’s break down what happened—and what it means for the future.
What Triggered This Market Crash?
While crypto markets often move on internal dynamics, this downturn was largely driven by external macro shocks. Here are the key catalysts:
1. Trump’s Surprise Tariff Move Sparks Global Panic
Over the weekend, former U.S. President Donald Trump signaled a serious shift in trade policy—not just rhetoric. He announced plans to invoke the IEEPA (International Emergency Economic Powers Act), a presidential authority allowing unilateral economic sanctions or tariff changes without congressional approval.
Markets had previously assumed Trump’s "tariff threats" were negotiating tactics. This time, it appears he’s ready to act—raising fears of a global trade war. With U.S. markets closed over the weekend, crypto—often seen as a risk-on asset—bore the brunt of early panic selling.
👉 Discover how global macro shocks impact crypto volatility and what to watch next.
2. Deepseek’s AI Breakthrough Shakes Tech Giants
A major blow came from the AI sector: Deepseek, a Chinese AI firm, claimed to have achieved breakthrough performance at a fraction of the computational cost. If true, this undermines a core assumption behind trillion-dollar valuations in AI—specifically, that massive GPU spending (led by companies like NVIDIA) is essential.
NVIDIA’s stock, which had been propping up broader tech indices, reacted sharply lower. Since U.S. equities are heavily reliant on a handful of tech giants, any weakness there spills over into sentiment across risk assets—including crypto.
3. Fed Holds Rates—Again
The Federal Reserve’s decision to pause rate cuts added to the gloom. While not entirely unexpected, it dashed hopes for near-term liquidity injections in 2025. Although Japan’s recent rate hike played a minor role, the dominant narrative remains centered on tightening global monetary conditions.
In short: a perfect storm of geopolitical tension, technological disruption, and hawkish central banks created the backdrop for this selloff.
Bitcoin vs. Altcoins: Divergence Deepens
Despite the chaos, Bitcoin’s resilience stands out.
- BTC hit a new all-time high in January and has since corrected just ~16%.
- The recent two-day drop was around 11%—sharp, but well within historical norms for a bull market pullback.
- Many analysts now refer to this as a “bull market shakeout”—a healthy correction rather than a trend reversal.
But altcoins? A different story.
- Ethereum (ETH) plunged from ~$3,400 to $2,100 in just two days—a 38% drop.
- Solana (SOL), despite hitting fresh highs recently, corrected over 40%.
- Smaller altcoins listed on major exchanges like Binance saw even steeper declines—some down 60%+ in hours.
Worse, many projects have now broken below their pre-bull run lows from late 2023. The narrative of “altseason” appears increasingly fragile.
Why Altcoin Season Might Be Over
I once believed that after BTC stabilizes above $100K, capital would rotate into altcoins—sparking a new phase of growth. But now? I’m reconsidering.
The Problem: Market Structure Has Changed
Unlike previous cycles:
- There are far more altcoin projects, many with high fully diluted valuations (FDV) but low circulating supply.
- These are often VC-backed tokens with massive unlock schedules.
- The result? A constant sell pressure from insiders, while retail investors absorb the dumps.
Projects use exchange listings not to grow ecosystems—but as exit ramps for VCs and founders. Users buy post-launch; then face immediate downward pressure from unlocks and profit-taking.
This dynamic kills wealth creation effects—the very engine that drives speculative mania in altcoins.
👉 See how smart money navigates high-FDV token risks in volatile markets.
The Shift in Market Psychology
Now, traders operate under a new rule:
“Don’t HODL altcoins—sell them into strength and rotate into BTC.”
This creates a self-reinforcing loop:
- Altcoins weaken → traders sell → more weakness → more selling.
- BTC strengthens as a safe haven.
- Even strong-performing alts eventually succumb to BTC dominance.
Until we see broad-based, sustained altcoin rallies—not just meme coin pumps—we’re unlikely to see a true altseason revival.
And let’s be honest: that kind of liquidity surge would require something like 2020-style quantitative easing. Given today’s fragile global economy and rising geopolitical tensions, such monetary expansion seems unlikely in 2025.
What Should You Do Now?
For Altcoins: Rethink Your Strategy
- Stop long-term holding weak projects. This is no longer a “buy and forget” market.
- Focus on short-term trading, targeting high-attention narratives (e.g., AI, DeFi, memes).
- Cut losses quickly—don’t hope for break-evens.
- Avoid low-liquidity or VC-heavy tokens unless you’re actively trading them.
For Bitcoin: Stay Patient
- BTC remains the core of crypto value.
- Absent a global financial crisis, I expect a slow, grinding bull market—not a parabolic run.
- Expect deeper corrections than traditional markets (20–30%), but not 80% collapses like 2018 or 2022.
FAQs: Your Burning Questions Answered
Q: Was this crash caused by something inside crypto?
A: No. The primary drivers were external—Trump’s tariff threat, AI disruption fears, and Fed policy—not exchange hacks or project failures.
Q: Is Bitcoin still in a bull market?
A: Yes. A 10–15% correction after an all-time high is normal. True bull markets climb walls of worry—and this fits the pattern.
Q: Should I buy the dip on altcoins?
A: Only selectively. Most alts lack fundamentals or catalysts. If you do buy, treat it as a trade—not an investment.
Q: Can altseason come back?
A: Only if macro liquidity surges dramatically—like renewed QE—or if new narratives drive organic adoption (e.g., real-world asset tokenization).
Q: How do I protect my portfolio in this environment?
A: Reduce leverage, increase cash/BTC reserves, set stop-losses, and avoid emotional decisions. Survival comes before profits.
👉 Learn how to build a resilient crypto portfolio during market turbulence.
Final Thoughts: Stay Disciplined, Stay Alive
I’ve paid for my mistakes in this downturn—just like many of you. But the market isn’t personal. It rewards humility and punishes arrogance.
The key now is risk management:
- Lower exposure during uncertainty.
- Keep dry powder for real opportunities.
- Never bet everything on predictions—even your own.
Bottoms aren’t predicted—they’re formed. And in times like these, with black swans flying (like unpredictable policy moves), technical analysis only goes so far.
Focus on what you can control: position size, leverage use, and emotional discipline.
Because in crypto, as long as you’re not liquidated—you’re still in the game.