Bitcoin Slides to $78K as Trump’s Tariffs Spark 7.7% Crypto Market Decline: Apr 7

Global crypto capitalization slid to $2.46 trillion after US tariffs and hawkish Fed commentary triggered widespread selling, even as trading volume exploded by 161.93% to $110.97 billion. Key metrics include Bitcoin dominance rising to 62.74% and the Crypto Fear & Greed Index plunging to 23 (extreme fear).

• Total crypto market cap fell more than 8% to around $2.5 trillion as Bitcoin dipped below $80 K.

• Kalshi traders now price a 61% chance of a US recession in 2025 following tariff announcements.

• Nearly 400 000 FTX creditors risk losing $2.5 billion in repayments if they miss the extended June 1 KYC deadline.

• Decentralized exchanges continue to gain share, with Hyperliquid ranking 12th in open interest despite a $6.2 million exploit.

• Over $675 million in long positions were liquidated in the past 12 hours amid heightened volatility.

The total crypto market cap stands at $2.46 trillion, marking a 7.66% decrease over the last 24 hours. Meanwhile, 24‑hour trading volume surged 161.93% to $110.97 billion, driven largely by stablecoins which accounted for $104.4 billion (94.08% of volume). DeFi protocols contributed $6.24 billion, or 5.63% of total volume. 

Crypto Fear & Greed Index | Source: Alternative.me

Bitcoin’s dominance has ticked up 0.75% to 62.74%, underscoring its relative resilience. Investor sentiment has deteriorated sharply: the Crypto Fear & Greed Index plunged to 23 (extreme fear) on Monday from 34 (fear) on Sunday.

Need to know what happened in crypto today? Here is the latest news on daily trends and events impacting Bitcoin price, blockchain, DeFi, NFTs, Web3 and crypto regulation.

• US stock futures opened sharply lower—S&P 500 futures sank nearly 4%, while Dow Jones futures plunged over 8%. The sell‑off spilled into crypto, triggering forced liquidations of roughly $675 million in long positions across major exchanges within 12 hours.

• President Trump’s “medicine” rhetoric around sweeping new tariffs rattled global risk assets. Some traders now anticipate a possible delay as affected trading partners lobby for exemptions, but the uncertainty has amplified downside risks in both equities and crypto.

• Despite the downturn, prominent voices like BitMEX co‑founder Arthur Hayes argue that this deleveraging could clear excess leverage and set the stage for a renewed Bitcoin rally once liquidity returns to the market.

• Cypherpunk Jameson Lopp warned of rising Bitcoin address poisoning attacks, where scammers generate look‑alike addresses matching victims’ past transactions. He urged wallet providers to fully display addresses and users to manually verify every destination string before sending funds.

• A recent court filing shows 392 000 FTX creditors risk losing $2.5 billion in repayments if they fail to complete mandatory KYC by June 1. Smaller claims under $50 000 account for $655 million, while larger claims total $1.9 billion. Affected users should re‑submit documentation through FTX’s support portal to preserve their claims.

• Pershing Square’s Bill Ackman suggested President Trump might postpone the April 5 tariffs to allow time for trade negotiations, noting that “practical reality is there is insufficient time for deals” before implementation.

• Ethereum’s Pectra upgrade is scheduled for May 7, promising faster, cheaper transactions. The SEC accepted Fidelity’s Solana ETF application, and BlackRock engaged with regulators on in‑kind ETF redemptions.

BTC/USDT price chart | Source: KuCoin

Bitcoin displayed notable resilience during this week’s broad market sell‑off, falling just over 6% in 24 hours to test the $76 000 support level before mounting a recovery to around $78 500. Many traders view the dip below $76 000 as a potential “fake breakdown,” given that bids reemerged swiftly at that threshold. A successful weekly close above $92 000 is now the critical technical signal that would confirm the end of this correction and the resumption of Bitcoin’s uptrend.

Meanwhile, realized volatility for BTC has contracted even as the CBOE Volatility Index (VIX) for equities surged to multi‑year highs. This divergence indicates that Bitcoin is entering a volatility squeeze, a pattern that historically precedes significant directional moves. Sentiment is split: bearish macro traders warn that escalating tariff tensions and recession odds could drive further declines, while optimistic analysts argue that the capitulation of over‑leveraged longs and the influx of stablecoin liquidity set the stage for a sharp rebound. With Bitcoin dominance rising to 62.74%, many market participants are positioning for a decisive breakout in the weeks ahead.

Kalshi, a US‑regulated prediction market, saw traders sharply increase their bets on an economic downturn, with the probability of a US recession in 2025 climbing to 61%—up from roughly 30% just two weeks earlier. On Kalshi, users buy and sell contracts that pay out based on whether specified events occur, in this case, two consecutive quarters of negative GDP growth as defined by the US Department of Commerce. The sudden spike in recession odds highlights traders’ growing unease over the fallout from President Trump’s tariff measures and their potential to choke off trade and corporate investment.

Polymarket forecasts 63% chance of a US recession in 2025 | Source: Polymarket

These elevated recession probabilities on Kalshi closely track those on Polymarket, another leading prediction platform, underscoring a broad-based 63% consensus among speculators that policy‑driven market shocks could tip the US economy into contraction. Institutional and retail participants alike have responded to the recent equity and crypto sell‑off by reallocating capital toward downside‑protection contracts, making Kalshi’s contracts a bellwether for real‑time sentiment on macroeconomic risks.

Read more: Top 7 Decentralized Prediction Markets to Watch in 2025

A recent US Bankruptcy Court filing reveals that 392 000 creditors of bankrupt exchange FTX risk having $2.5 billion in claims disallowed if they do not complete the mandatory KYC verification by June 1, 2025. Under the court’s schedule, claims under $50 000—totaling $655 million—and larger claims amounting to $1.9 billion will be expunged in full for non‑compliance.

FTX’s recovery plan anticipates distributing at least 118% of original claim values in cash to 98% of verified creditors, making timely verification critical. Affected users should log into FTX’s support portal, create or access their account, and re‑upload required identity documents to preserve their repayment rights. Failure to meet the deadline will permanently forfeit these substantial sums.

DEXs’ trading volume | Source: DefiLlama

Decentralized exchanges (DEXs) have steadily eroded the market share of centralized platforms, driven by traders’ desire for non‑custodial access and innovative derivatives products. According to CoinGecko, DEXs now account for a growing slice of on‑chain trading volume, with platforms like Uniswap and PancakeSwap leading in spot liquidity. In the derivatives space, Hyperliquid has climbed to 12th place globally by open interest, boasting over $3 billion in outstanding positions—outpacing legacy venues such as Kraken and BitMEX.

However, the rapid ascent of DEXs comes with heightened risks, as illustrated by a $6.26 million exploit on Hyperliquid’s Jelly my Jelly (JELLY) memecoin market. An anonymous whale manipulated the platform’s liquidation parameters by opening offsetting long and short positions, pocketing the difference when the protocol’s risk engine failed to liquidate a massive short in time. This incident, the second major breach on Hyperliquid in March, underscores the fragility of automated smart‑contract mechanisms. Analysts warn that post‑exploit interventions—such as emergency freezes or centralized rollbacks—may erode the trust that underpins the decentralized ethos, potentially slowing DEX adoption unless governance frameworks and code audits are strengthened.

Read more: What Is DEX Screener and How to Use It for Crypto Trading?

This week’s tariff‑driven sell‑off underscores the sensitivity of crypto to macro policy and regulatory shifts. While near‑term volatility remains elevated, Bitcoin’s resilience, burgeoning DeFi volumes, and institutional ETF progress suggest that strategic entry points may arise once uncertainty abates. Stakeholders should monitor key technical levels, KYC deadlines, and regulatory developments to navigate the evolving market landscape.