Bitcoin Plunges: $877 Million Liquidation Wave Sweeps Crypto Market, Global Economic Conditions and Regulatory Uncertainty Cited as Primary Causes

Bitcoin Plunges: $877 Million Liquidation Wave Sweeps Crypto Market, Global Economic Conditions and Regulatory Uncertainty Cited as Primary CausesOn April 7th, Beijing time, Bitcoin plummeted 8.65%, hitting a low of $74,500, triggering intense volatility in the cryptocurrency market

Bitcoin Plunges: $877 Million Liquidation Wave Sweeps Crypto Market, Global Economic Conditions and Regulatory Uncertainty Cited as Primary Causes

On April 7th, Beijing time, Bitcoin plummeted 8.65%, hitting a low of $74,500, triggering intense volatility in the cryptocurrency market. This sharp decline not only resulted in massive investor liquidations but also highlighted the significant impact of the complex global economic situation and the uncertainty surrounding regulatory policies on the virtual asset market. As of 4:20 PM, Bitcoin was trading at $75,798, maintaining a 24-hour drop of 8.65%.

The scope and depth of this cryptocurrency storm were shocking. Ethereum's price fell as much as 17%, reaching a low of $1,420; other tokens, including SOL, XRP, and Dogecoin, also suffered significant losses, with declines approaching 20%. Market panic spread rapidly, causing substantial losses for investors who had bet on Bitcoin's upward trajectory.

According to virtual asset data platform CoinGlass, as of 9:20 AM on April 7th, 286,600 accounts globally had been liquidated, totaling $877 million. However, this was merely the initial data from the early stages of the crash. By 4:05 PM, the number of liquidated accounts had surged to 446,500, with total liquidations reaching a staggering $1.381 billion.

Behind this liquidation wave are countless heartbreaking stories of investors. I got liquidated! I kept buying the dip and it kept dropping. I set a stop-loss, but I never expected it to fall this hard! These desperate voices reflect the immense impact this market storm has had on investors. Since the beginning of 2025, Bitcoin's price has cumulatively fallen by 18.5%.

This Bitcoin crash is closely related to the complex and severe global economic situation. The restrictive global trade policies implemented by former US President Trump continue to impact global financial markets. On April 2nd, Trump signed an executive order announcing a 10% "minimum baseline tariff" on trading partners and even higher tariffs on certain others. This news proved to be the last straw, prompting investors to sell off risk assets, with the cryptocurrency market bearing the brunt of the impact.

Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, pointed out that several key factors contributed to Bitcoin's plunge. Firstly, the global economic situation is complex and volatile, particularly the trade protectionist policies of the Trump administration, which exacerbated uncertainty in global financial markets, dampening investor confidence and leading to the sell-off of risk assets, including Bitcoin.

Secondly, market sentiment played a crucial role in amplifying Bitcoin's price fluctuations. Widespread panic intensified selling pressure, creating a vicious cycle. Furthermore, regulatory uncertainty is also a significant factor. Governments' inconsistent approaches to regulating virtual assets and frequent policy changes pose significant risks to investors.

Yu Jianing, co-chair of the Blockchain Specialist Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, echoed similar sentiments. He noted that with increasingly interconnected global capital flows, virtual assets, as one of the most liquid and risk-prone asset classes, cannot remain unaffected. The prolonged period of high price consolidation had accumulated a large number of leveraged long positions in the market, lacking effective hedging mechanisms. The sudden arrival of macroeconomic headwinds caused prices to plummet rapidly, triggering a chain reaction of liquidations and further reinforcing the downward trend.

The price volatility of Bitcoin and other virtual assets is a result of the combined effects of macroeconomic variables, policy expectations, market liquidity, and internal structural leverage conditions. Global trade conflicts and regional tensions often lead to decreased investor risk appetite.

Yu Jianing warned investors about multiple risks: extreme volatility risk (virtual assets may experience drastic fluctuations of tens of percentage points in a short period); regulatory risk (changes in national policy stances can quickly impact market sentiment); and technological risk (including potential threats such as blockchain security vulnerabilities and smart contract flaws).

He believes the future trajectory of Bitcoin will depend on the evolution of several key variables, advising investors to remember that virtual assets remain high-risk investments. The current environment is not conducive to blindly entering the market; defensive asset allocation is recommended, avoiding high-leverage strategies and prioritizing cash flow and risk exposure management. In the short term, Bitcoin prices are likely to continue fluctuating under the influence of global economic conditions, market sentiment, and regulatory policies. In the long term, if Bitcoin can maintain its scarcity, security, and decentralization characteristics and gain wider acceptance from institutional investors, its price could still potentially rise.

Wang Peng also advises investors to remain cautious, understand the high volatility of Bitcoin and other virtual assets, be mentally prepared for risk management, and closely monitor market dynamics and regulatory policy changes.

This Bitcoin crash serves as a wake-up call for investors, reminding us once again of the high-risk nature of the virtual asset market. Investors should invest rationally, make prudent decisions, avoid blind following of trends, and prevent unnecessary losses. The future direction of the virtual asset market remains uncertain due to the combined effects of global economic conditions, regulatory policies, and market sentiment. Investors need to closely monitor market changes and manage risks effectively to succeed in this challenging market. In the future, a more comprehensive regulatory framework and more mature market mechanisms will help to reduce the risks in the virtual asset market and promote its healthy and sustainable development. However, for now, investors need to remain prudent and rationally view the virtual asset market, avoiding the substantial risks associated with blind investment. Only by fully understanding market risks can investors make wise investment decisions and minimize losses. Continuously monitoring global economic conditions, regulatory policy changes, and market dynamics will help investors better grasp market trends and make more accurate investment judgments. In conclusion, investment in the virtual asset market involves both risk and opportunity, and investors must proceed cautiously and invest rationally.