In a stark contrast to the broader financial markets, major cryptocurrencies experienced sharp declines on Sunday amid intense selling pressure, even as stock futures edged higher following encouraging inflation data. Bitcoin, the largest cryptocurrency by market capitalization, dipped into the $68,000 range, with its trading volume surging 11% over the past 24 hours. Ethereum, the second-largest, tumbled below $2,000, accompanied by an 80% spike in its 24-hour trading volume, while Dogecoin plunged more than 8%. The global cryptocurrency market capitalization stood at $2.28 trillion, reflecting a 1.07% drop over the same period.
The downturn in the crypto space was marked by significant liquidations, with roughly $325 million wiped out from the market in the last 24 hours, according to data from Coinglass. Of that total, $240 million came from bullish long positions that were forced to close amid the price swings. Bitcoin's open interest, a measure of outstanding futures contracts, fell 2.69% during this time, mirroring the decline in its spot price. Despite the volatility, the majority of retail and whale investors on the Binance exchange maintained long positions on Bitcoin, betting on an eventual recovery.
Market sentiment remained deeply pessimistic, with the Crypto Fear & Greed Index registering in the "Extreme Fear" zone. This comes as investors grapple with ongoing uncertainties in the digital asset space, including regulatory developments and macroeconomic influences. The slide in cryptocurrencies occurred against a backdrop of positive signals elsewhere in the economy, highlighting the often decoupled nature of crypto from traditional markets.
Meanwhile, stock futures showed modest gains overnight on Sunday. As of 7:42 p.m. EDT, Dow Jones Industrial Average futures rose 37 points, or 0.07%. Futures tied to the S&P 500 climbed 0.18%, and Nasdaq 100 futures added 0.13%. These upticks were buoyed by Friday's release of consumer price index data, which indicated that the annual rate of consumer inflation slowed to 2.4% in January. This figure missed economists' expectations of 2.5% and marked the lowest inflation reading since May 2025.
The softer-than-expected inflation print has fueled discussions about potential interest rate adjustments from the Federal Reserve. According to the CME FedWatch tool, the odds of a 25-basis-point rate cut at the Fed's March meeting stood at a modest 9.8%. Such a move could provide relief to risk assets like cryptocurrencies, though the path forward remains uncertain given the central bank's cautious stance on monetary policy.
In the commodities market, spot gold traded down 0.41% at $5,021 per ounce on Sunday, retreating from a rally it enjoyed on Friday in response to the inflation data. Gold often serves as a safe-haven asset during times of economic uncertainty, and its pullback may reflect renewed optimism in equities. Traders will have the day off on Monday, as both the New York Stock Exchange and Nasdaq are closed in observance of Presidents' Day.
Amid the crypto sell-off, analysts offered varied interpretations of Bitcoin's technical setup, pointing to potential reversal patterns that could signal a rebound. Popular cryptocurrency trader Ali Martinez highlighted what he described as an "Adam & Eve" double bottom pattern on Bitcoin's one-hour chart. This reversal formation, which can occur in both uptrends and downtrends, is characterized by a rounded bottom followed by a sharper one, potentially indicating a shift from bearish to bullish momentum.
"A break above $71,500 could open the door to $79,000," Martinez predicted in his analysis shared on social media. Such a breakout would represent a significant recovery from current levels and could reinvigorate investor confidence in the cryptocurrency. Martinez's outlook contrasts with the immediate selling pressure but aligns with historical patterns where double bottoms have preceded rallies.
Another prominent chartist, Michaël van de Poppe, characterized the recent Bitcoin movement as a "classic correction." He pointed to a CME gap at $69,000 on the Bitcoin futures market, which arises from discrepancies between closing and opening prices on the Chicago Mercantile Exchange. "Probably we’ll stay around this level until Monday open and then we’re back up towards the highs," van de Poppe forecasted, suggesting a temporary consolidation before an upward move.
CME gaps are closely watched by traders as they often act as magnets for price action, with Bitcoin historically filling these voids before resuming its trend. Van de Poppe's view provides a more tempered perspective, acknowledging the correction while anticipating a return to recent peaks, which have hovered around $70,000 in recent weeks. These analyst insights come as Bitcoin navigates a volatile period following its all-time highs earlier in the year.
The cryptocurrency market's reaction to the inflation data underscores its sensitivity to broader economic indicators. While lower inflation typically supports risk-on sentiment, the crypto sector has been prone to amplified moves due to its speculative nature and leverage in derivatives trading. The $325 million in liquidations highlights how leveraged positions can exacerbate downturns, leading to cascading sales that pressure prices further.
Looking back, Bitcoin's slide into the $68,000 region follows a period of consolidation after surging past $70,000 in late 2023 and early 2024. Factors such as the approval of spot Bitcoin exchange-traded funds earlier this year have brought institutional interest, yet retail enthusiasm has waned amid profit-taking and macroeconomic headwinds. Ethereum's drop below $2,000 revives memories of its struggles during previous bear phases, though ongoing network upgrades like the shift to proof-of-stake aim to bolster its long-term viability.
Dogecoin's steeper decline of over 8% reflects its meme-coin status, where prices are often driven more by social media hype than fundamentals. The spike in trading volumes across these assets indicates heightened activity, potentially setting the stage for volatility in the days ahead. As the market digests the latest data, the interplay between crypto and traditional finance will remain a focal point for investors.
Broader implications of Sunday's movements could influence sentiment heading into the new trading week. With U.S. equity markets closed on Monday, attention may shift to Asian and European sessions, where crypto trading never sleeps. The persistence of "Extreme Fear" on the Fear & Greed Index suggests caution among participants, but analysts like Martinez and van de Poppe see opportunities for upside if key technical levels are breached.
Ultimately, the cryptocurrency market's resilience will be tested by upcoming economic releases and Fed communications. As Bitcoin hovers near $68,000 and eyes the $71,500 resistance, traders are poised for what could be a pivotal week. Whether the Adam & Eve pattern materializes or the CME gap draws prices lower remains to be seen, but the sector's high-stakes environment continues to captivate global audiences.