Bitcoin and Most Altcoins Have Crashed, Erasing Some of the Gains Made Earlier This Week

input: Bitcoin and most altcoins have crashed, erasing some of the gains made earlier this week. PI Network price continued its strong downtrend, reaching a low of $0.80

Bitcoin and most altcoins have crashed, wiping out some of the gains made earlier in the week. PI Network price continued its strong downtrend, reaching a low of $0.80, its lowest level since February 22. It has plunged by over 73% from its all-time high.

XRP price dropped to $2.39, down by 7.85% from its highest level this week, while Stellar (XLM) and Dogecoin (DOGE) fell by over 5%. Altogether, the market cap of all cryptocurrencies tracked by CoinMarketCap dropped by 1.5% to $2.84 trillion.

Bitcoin Price Risky Patterns

The first reason why these altcoins crashed is that Bitcoin formed risky patterns, signaling that it had not made a strong bullish breakout yet. It formed a rising wedge pattern, a popular bearish reversal sign. This pattern comprises two ascending and converging trendlines and often leads to a reversal.

Bitcoin formed a break-and-retest pattern. It returned to the neckline of the double-top chart. It also formed a death cross as the 50-day and 200-day Weighted Moving Averages (WMA) crossed each other. Bitcoin also struggled to move beyond the psychological barrier of $90,000.

Therefore, as BanklessTimes warned there is a risk that it would drop, and possibly retest the support at $76,890, its lowest point this month. Historically, altcoin prices often drop when Bitcoin is falling.

Pi Network, XRP, and Stellar Crashed as Trade Risks Rose

These altcoins also crashed as trade concerns continued after Donald Trump announced tariffs on auto imports. These tariffs were announced ahead of his so-called Liberation Day, when he will impose reciprocal tariffs.

The worsening trade issues explain why American stocks crashed on Wednesday. The Dow Jones Index fell by 170 points, the S&P 500 by 65 points, and the Nasdaq 100 by 375 points.

The risk is that these tariffs may lead to stagflation in the United States. Stagflation is a situation characterized by high inflation and slow economic growth, and is often the riskiest situation in an economy.

Stagflation is risky because there is usually no easy way out for the Fed. Cutting interest rates to boost the economy often leads to higher inflation. Hiking rates to slow inflation affects the economy. Mark Zandi, a top economist at Moody’s stated:

“Remember my #1 recession watch indicator is that if confidence falls by 20 points over 3 months, consumers stop spending and recession ensues about 6 months later. This indicator isn’t flashing recession red, but it is flashing a bright yellow.”

A recession would be a good thing for Bitcoin and altcoins like Stellar, Pi Network, XRP, and Dogecoin. In most cases, a recession leads to low inflation and Federal Reserve cuts, which then boosts altcoin prices.