Bitcoin and Ether tumble as Nasdaq plummets 5% amid liquidity squeeze

Bitcoin and Ether have dropped sharply in recent days, hitting lows of $58,000 and $1,507 respectively. The decline came as the Nasdaq fell by 5%, with analysts linking the crypto pullback to tighter financial conditions and shifting liquidity. The US 10-year Treasury yield remained near 4.53% after stronger-than-expected labour data reduced hopes for Federal Reserve rate cuts. This economic signal contributed to a broader market downturn, affecting both stocks and cryptocurrencies.

Bitcoin and Ether reached cycle lows as the Nasdaq recorded a 5% daily drop. Meanwhile, global M2—a measure of money supply—climbed to $122.6 trillion over the past year, even as Bitcoin retreated from its $126,000 peak.

Bitwise noted that Bitcoin often reacts faster than traditional markets during liquidity shifts, partly because it trades 24/7. The firm also highlighted that the SSR RSI, a liquidity indicator, had dropped to 13, suggesting oversold conditions. The recent crypto sell-off aligns with broader market stress, as tighter liquidity and strong US economic data weigh on investor sentiment. With Bitcoin and Ether near recent lows, traders are watching for further signals from equities and Treasury yields.