March 4 Market Review: U.S. Stocks Plunge, Crypto Shows Resilience

Author: Shenchao TechFlow

On Tuesday, Wall Street experienced another dismal trading day.

The Dow Jones fell 403 points (-0.83%) to close at 48,501, the S&P 500 dropped 0.94% to 6,816, and the Nasdaq declined 1.02% to close at 22,516.

But the numbers alone cannot capture the intensity of the day.

During trading, the Dow Jones Industrial Average plunged as much as 1,200 points (-2.6%), the S&P 500 dropped as much as 2.5%, and the Nasdaq tumbled 2.7%, marking the most severe intraday sell-off since early February.

The market is like a nervous bird—any slight disturbance triggers massive selling. As the U.S.-Iran war enters its fourth day and Iran closes the Strait of Hormuz, oil prices surge another 8%, sending investor panic to new highs.

The energy market has completely spiraled out of control.

WTI crude oil surged $5.82 (+8.2%) to $77.05 per barrel, while Brent crude skyrocketed $6.09 (+7.8%) to $83.83 per barrel.

This is the largest single-day gain since February. More alarming is that oil prices have risen by over $17 since last Friday, approaching a 26% increase.

The Strait of Hormuz—through which 20% of global oil supplies pass—remains effectively closed. Iran has not only blockaded the strait but also begun attacking energy infrastructure across the Middle East, including oil fields and tankers in Saudi Arabia and the UAE.

On Tuesday afternoon, Trump posted a statement on Truth Social: "The United States will ensure the free flow of energy to the world, no matter what." He pledged that the U.S. Navy would escort tankers through the Strait of Hormuz.

This temporarily eased market panic—oil prices retreated from their intraday highs, and stock markets narrowed their losses from 2.5% to around 1%.

But the problem remains severe: if oil prices stay above $80, inflation could spiral out of control, and expectations for Fed rate cuts could vanish entirely.

Tuesday was a true "bloodbath day"—all 11 sectors of the S&P 500 closed lower, with no safe havens.

Hard-hit areas:

• The materials sector plunged 4.5%, marking its largest single-day decline since April 2025. Lithium giant Albemarle dropped 7%; copper miner Freeport-McMoRan fell 4%; gold producer Newmont slid 7%.
• The industrial sector fell over 2%. Caterpillar dropped 3.98%, and Boeing fell 2.52%.
• Healthcare fell over 2%, and consumer staples fell over 2%.

The only bright spot: Target rose 3% after beating Q4 earnings expectations, with the CEO stating, "Sales saw a strong rebound in February"; Best Buy surged 9% despite an unexpected decline in holiday-season sales, as its Q1 guidance was optimistic.

Tech stocks continue to plunge: Nvidia falls 1.3%; Tesla drops 2.7%; software stocks remain under heavy pressure, with MongoDB downgraded to Neutral by Baird due to AI-related threats, down over 40% year-to-date.

The VIX volatility index surged to 25.16 on Tuesday, reaching its highest level since November last year.

This number indicates that the market expects significant volatility in the stock market over the next 30 days. A VIX above 25 is generally considered the "fear" zone, and above 30 is deemed "extreme fear."

More concerning, market expectations for the duration of the conflict are worsening. Early Tuesday, Trump warned, "This conflict could last four weeks."

Four weeks? That’s much longer than the market’s initial expectation of a “few days to resolve.” If the war truly lasts a month, oil prices surge above $100 per barrel, and inflation spirals completely out of control, the Fed might not only refrain from cutting rates but could be forced to raise them instead—something that would be catastrophic for the stock market.

Surprisingly, gold plummeted on Tuesday.

Spot gold plunged 3.7% in a single day, falling from a high of $5,400 to approximately $5,148, marking its largest daily drop since the $600 plunge on January 30.

Silver fared worse, plunging 6%. Platinum fell 10%, and palladium dropped 7%.

Why did safe-haven assets plummet instead? Because the dollar strengthened.

The U.S. Dollar Index surged on Tuesday, breaking above the 100 level for the first time since May last year. When the dollar strengthens, dollar-denominated gold and silver tend to decline.

Investors are pouring into the U.S. dollar—the world’s ultimate safe-haven asset. In contrast, traditional safe-haven assets like gold and silver have become "liquidity sacrifices": during periods of market panic, investors sell any assets that can be quickly converted into cash.

This is the most surprising story of today.

Amid a sharp drop in U.S. stocks, a collapse in gold prices, and a surge in the VIX, Bitcoin demonstrated remarkable resilience.

According to CoinGecko data, Bitcoin rose slightly to approximately $69,413 on Tuesday, up +5.8% over 24 hours, completely reversing the sharp decline in U.S. stocks.

Ethereum also performed strongly, remaining stable near $2,000. Major cryptocurrencies such as Solana and Cardano showed solid performance.

The global cryptocurrency market cap remains stable at $2.41 trillion, with a slight 0.9% increase over the past 24 hours. Trading volume reached $123 billion, indicating strong market liquidity.

Bitcoin's market capitalization has reached $1.36 trillion, with a market share of 56.7%, indicating that capital is flowing toward Bitcoin as a "crypto safe haven" during periods of market volatility.

Why are cryptocurrencies so resilient?

This performance defies conventional wisdom. In the past, whenever geopolitical crises emerged, cryptocurrencies always plunged alongside tech stocks, as both were viewed as "high-risk assets."

But this time is different. Several key factors are supporting the crypto market:

The "digital gold" narrative is making a comeback.

Gold's sharp decline has made Bitcoin's narrative as "digital gold" more credible.

The problem with traditional gold is that it remains influenced by the strength of the U.S. dollar. When the dollar strengthens, gold inevitably declines because it is priced in dollars.

But Bitcoin is different. Bitcoin is true "borderless money"—it does not rely on any single fiat currency for pricing and does not automatically depreciate when the U.S. dollar strengthens.

Amid instability in the Middle East and accelerating narratives around de-dollarization, Bitcoin’s this characteristic is being reevaluated.

Long-term holders have stopped selling.

On-chain data shows that selling by long-term holders (wallets holding coins for over 365 days) has largely ended.

In early February, the 30-day rolling net sell volume by long-term holders reached 243,737 BTC. However, by March 1, this figure had plummeted to 31,967 BTC, a decline of as much as 87%.

This means that the panic selling has ended, and the market is forming a bottom.

Miner selling pressure is easing.

Selling pressure from Bitcoin miners has also significantly eased. On February 8, net miner sales peaked at 4,718 BTC, but by March 1, they had declined to 837 BTC.

Although the negative growth in hash rate (due to some miners shutting down) is concerning, analysts note that miners are not surrendering but rather strategically diversifying their operations.

Big whales are quietly accumulating.

Super whales holding 100,000 to 1 million BTC added approximately 14,000 BTC between February 19 and 20 and have not sold since.

A small whale holding 1,000–10,000 BTC began accumulating on February 25, increasing their holdings from 4.22 million BTC to 4.23 million BTC.

Smart money is buying against the trend.

Amid widespread pessimism, Fundstrat’s star analyst Tom Lee has issued an optimistic forecast.

On Wednesday, Lee said in a CNBC interview: "The worst selling will happen this week. I expect March to be a 'rally month' for the stock market."

Lee also added on social media: "We understand that war headlines have made investors nervous, but we expect the stock market to rise in March, led by MAG7, software stocks, and cryptocurrencies (BTC, ETH)."

Lee's logic is that cryptocurrencies and tech stocks have already undergone significant pullbacks and may be in their "final consolidation phase," which could lead to an "April rally."

Historical data supports Lee’s view. Wells Fargo data shows that the S&P 500 typically rebounds within two weeks after major geopolitical conflicts and averages a 1% gain three months later.

Bitcoin Technical Analysis: $65,000 Is Key

Currently, Bitcoin is trading in the range of $65,000 to $68,000.

Key support level:

• $65,000: A break below could trigger a selling wave, pushing prices down to $64,600 or even $64,000.
• $63,000: Absolute bottom; a break below could see $60,000.

Key resistance level:

• $68,000: Already tested multiple times; a breakout could trigger FOMO.
• $70,000: Psychological barrier; after breaking through, target $74,000–$75,000

Technical analyst Michael van de Poppe said: "Bitcoin must hold $65,000. Once it does, pushing above $70,000 is just a matter of time."

The market is now focused on only one question: How long will the war last?

Trump warned on Tuesday: "This conflict could last four weeks."

If it's truly 4 weeks: oil prices will surge past $100, inflation will spiral out of control, the Fed may be forced to raise rates, and the stock market could face an even sharper decline.

If it's just a few days: oil prices decline, inflation eases, stock markets rebound, and cryptocurrencies may follow suit with gains.

Fundstrat’s Tom Lee bets on the latter: "The worst selling will end this week, and March will be a rising month."

Legendary investor Steve Eisman said last week: "I won't change any of my trades because of this conflict."

But the market clearly doesn't think so.

The VIX surges, materials sector plummets, gold collapses—these are all the market screaming: "We're afraid!"

The only exception is cryptocurrency.

Despite a stock market crash and a gold plunge, Bitcoin demonstrated surprising resilience. This is a sign that the crypto market is maturing, evolving from a "pure risk asset" into an "alternative safe-haven asset."

Fear Index at 10: Long-term holders have stopped selling, whales are quietly accumulating—all historical data point to the same conclusion: accumulation is underway.

Can it rebound above $70,000 in March?

The answer will be revealed in the coming days.