Leading cryptocurrencies plunged on Wednesday on fears of a full-blown trade war between the U.S. and Europe.

What Happened: Bitcoin sank below $83,000 for the first time in 15 weeks before pairing losses late in the evening. The leading cryptocurrency was down over 21% since its January all-time high.

In the last 24 hours, BlackRock transferred over $160 million in BTC to Coinbase, which were outflows from iShares Bitcoin Trust ETF IBIT, according to Arkham Intelligence.

Similarly, Ethereum plunged to an intraday low of $2,255.05, its lowest since Donald Trump's presidential victory.

The continuing price decline was precipitated by reports of Trump's threats to impose 25% tariffs on the European Union.

Over $760 million was liquidated from the cryptocurrency market in the last 24 hours, with $606 million in long positions erased.

That said, a recovery to $90,500 would liquidate over $1 billion worth of short positions

Bitcoin's Open Interest fell by 5.45% in the last 24 hours and has collapsed by more than 18% since the beginning of February.

The "Extreme Fear" sentiment strengthened, according to the Crypto Fear and Greed Index, fueling concerns of further downsides.

Top Gainers (24-Hours)

The global cryptocurrency market capitalization stood at $2.77 trillion, shrinking by 4.91% in the last 24 hours.

Major stock averages snapped a losing streak Wednesday. The S&P 500 gained 0.01% to close at 5,956.06 after four consecutive days of ending in the red. The tech-focused Nasdaq Composite rose 0.26% to end at 19,075.26. The Dow Jones Industrial Average was the outlier, closing 0.43% lower at 43,433.12.

Nvidia Corp. NVDA shares rose 3.67% ahead of its fourth-quarter earnings report, boosting the overall sentiment. The AI behemoth reported a higher-than-expected revenue and earnings per share.

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Analyst Notes: Widely followed cryptocurrency analyst and investor Rekt Capital noted the formation of Bitcoin's new "CME Gap" between ~$92,700 and ~$94,000

"This offers some confluence to the idea of price revisiting $93,500 at some point in the future as part of a post-breakdown relief rally," the analyst predicted.

CME gaps are the differences in price between the closing price on a given trading day and the opening price on the following trading day on a Bitcoin futures chart. 

In a note to Benzinga, Chris Kline, COO and Co-Founder of BitcoinIRA, called Bitcoin's ongoing consolidation phase a "healthy reset."

"Bitcoin has established a more defined trading range following its impressive run to near all-time highs, demonstrating resilience despite short-term fluctuations," Kline added.

The analyst suggested that such periods of measured trading activity typically precede upward momentum.

Photo by Avi Rozen on Shutterstock

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