Bitcoin and crypto falling after overnight sales, but recovery already emerging with Trump in focus

The cryptocurrency market experienced a period of significant volatility during Asian overnight hours, with Bitcoin plunging from $67,700 to $64,270 shortly after midnight UTC, before rebounding to $66,300 in early European hours. This movement reflected a broader dynamic where falling crypto prices triggered cascading liquidations, but signs of recovery are beginning to emerge as analysts reassess geopolitical risks and tariff policies.

The decline coincided with turbulence in U.S. stock markets, where S&P 500 futures fell 0.84% at Sunday night open before gradually recovering. Meanwhile, gold and silver gained strongly, reaching their highest levels since January 30, signaling a shift toward safe-haven assets.

The Night Drop That Spooked the Market

The overnight sell-off was particularly severe in altcoins. Solana (SOL) and Sui (SUI) dropped between 7% and 8% amid reduced liquidity, triggering a total of $270 million in altcoin ecosystem liquidations, according to CoinGlass. This selling pressure exemplifies how crypto declines during periods of concentrated liquidity produce amplified effects.

Tokens like PUMP from pump.fun lost 8.5% during the critical hours, while Layer Zero’s native asset (ZRO) suffered 16.5% losses in 24 hours. These sharp movements reveal how the altcoin market remains vulnerable to shocks when trading volume is insufficient.

Trump, Iran, and Precious Metals: Drivers of Volatility

President Donald Trump’s announcement of new 15% global tariffs on trading partners injected fresh uncertainty into the investment environment. Simultaneously, escalating tensions between the U.S. and Iran, including increased U.S. military presence near the Strait of Hormuz, triggered defensive moves toward assets considered safe havens.

This combination of geopolitical pressures and restrictive trade policies explains why gold and silver advanced while higher-risk assets, including cryptocurrencies, experienced sell-offs. The contrast between the recovery of precious metals and the decline of falling crypto illustrates the dichotomy in investors’ allocation preferences.

Derivatives Market Sentiment with Falling Crypto Prices

Derivatives data reveal growing anxiety among traders. The 30-day Bitcoin Implied Volatility Index (BVIV) jumped 9% to surpass 60%, signaling fears of new turbulence. On Deribit, put options for Bitcoin and Ethereum traded at premiums over call options across all maturities, reflecting persistent fears of decline.

Traders aggressively sought protection at defensive levels of $58,000, $60,000, and $62,000 in put options, preparing for further deterioration scenarios. Meanwhile, open interest in crypto futures remains subdued, staying below $100 billion for over two weeks, indicating continued weak demand for leverage.

In the past 24 hours, $500 million worth of positions were forcibly liquidated on trading platforms, further constraining traders’ margin capacity. Conversely, interest in Tether Gold (XAUT) futures increased by 14%, indicating capital flow into derivatives linked to traditional assets.

Altcoins Drop in Reduced Liquidity, but Recovery Is Already Underway

While falling crypto prices dominated the narrative overnight, some altcoins began showing resilience during European hours. The ETHFI restaking token rose over 10% from Monday morning lows, suggesting selective appetite for specific assets.

Toncoin (TON), linked to the Telegram platform, remained relatively stable, falling only 3.6% before rebounding with a 4.9% gain. CoinDesk’s DeFi Select Index (DFX) proved more resilient than average, losing just 1.84%, while the Smart Contract Platforms Index and Computing Index declined 3.56% and 3.23%, respectively.

Only two assets—ZEC and CRO—showed positive cumulative volume delta (CVD) in the last 24 hours, indicating buying pressure. Bitcoin and other major coins display negative CVDs, signaling that selling pressure remains dominant.

Outlook: Between Support at $60K and Resistance at $76K

Bitcoin’s future movement will critically depend on two intertwined factors. First, the stability of oil prices and maritime traffic through the Strait of Hormuz—variables that could trigger a new test of the $74,000 to $76,000 range. Second, any escalation in geopolitical scenarios could reignite selling, dragging prices back toward the $60,000 zone.

The latest Trump announcement of a five-day pause on attacks against Iranian energy infrastructure provided tactical relief, allowing Bitcoin to surpass $70,000 and retain most of those gains. Altcoins, including Ether, Solana, and Dogecoin, rose about 5%, reflecting improved risk appetite. The S&P 500 and Nasdaq gained approximately 1.2% each, signaling a gradual return to normality.

As markets navigate this crossroads, the question remains: will Bitcoin establish a credible local bottom to support altcoins for a longer-term rally, or will we continue to see cycles of crypto declines and partial recoveries as macro factors remain uncertain?