Crypto Market Deepens Correction: Defensive Strategies Amid Liquidity Crisis

On March 10, 2026, the cryptocurrency market continued its recent weakness, with Bitcoin touching a low of $80,000 intraday, and Ethereum falling below the $2,000 threshold, down nearly 6%. Although the previous announcement by the Trump administration of a strategic digital asset reserve plan sent positive signals, macro-level uncertainties surrounding tariff policies, shrinking market liquidity, and the withdrawal of leveraged funds collectively suppressed risk asset performance. Data from institutions like Ethena show that current net long demand is at a historic low, and market sentiment remains cautious. In the short term, the market is at a critical stage of seeking a new equilibrium price, and investors are advised to adopt defensive allocation strategies, focusing on the effectiveness of key support levels.

1. Market Overview: Price Decline and Sentiment Deterioration

Today, the overall cryptocurrency market shows a downward trend. Bitcoin's price retreated to around $80,000, a significant correction from its previous high of $109,079 (December 2024). Ethereum performed even weaker, breaking below the $2,000 psychological level, with a daily decline of nearly 6%. Mainstream altcoins like Solana and XRP also faced selling pressure.

From a macro perspective, despite Trump’s announcement last week of "cryptocurrency reserves" and a strategic Bitcoin reserve plan, market reactions have been tepid. This reflects that current macro risks—especially the "reciprocal tariffs" policy set to take effect on April 2—are exerting more pressure on risk assets than the positive policy signals.

2. Liquidity Analysis: Leverage Withdrawals and Demand Contraction

Market liquidity is a key dimension for understanding the current trend. According to Ethena’s balance sheet data, its deployed capital has plummeted from over $5 billion at the start of 2025 to just $791 million, representing 12.9% of its all-time high. This data is highly indicative:

First, net long demand is at a historic low. Ethena, as a major participant in perpetual contract arbitrage,’s position size directly reflects the strength of excess long demand in the market. Currently, deployed funds are only 71% of the lowest level in 2025, indicating a significant cooling of institutional long interest.

Second, leverage funds continue to withdraw. Data from BitMEX shows a 37% reduction in open futures contracts in February, indicating substantial leverage withdrawal from the market. While this deleveraging process reduces systemic risk, it also weakens the market’s rebound momentum.

Third, whale behavior is diverging. Notably, data from late March shows that whale addresses (holding over 1,000 BTC) increased their holdings by 213,000 BTC in a single week, the largest weekly accumulation since Q4 2024. This suggests that long-term holders are showing some willingness to allocate at current prices, but a sufficient market consensus has yet to form.

3. Technical Analysis: Key Support and Resistance

From a technical perspective, the market is currently in a crucial price range battle.

Bitcoin: $80,000 is an important recent support level. Looking back at August 2024, Bitcoin started its rally from $61,000. The current correction from a high to around $80,000 completes a macro cycle adjustment. Based on your previous analysis of the $91,000 resistance level, the current price has broken below that level, and it’s necessary to observe the validity of the $80,000 support. If this level is lost, the next support may be in the $75,000–78,000 range.

Ethereum: The $2,000 psychological level has been broken, indicating a short-term weak technical outlook. Compared to Bitcoin, Ethereum’s volatility is more pronounced, and during market corrections, it often faces greater selling pressure.

4. Operational Strategy Recommendations

Based on the current market environment, the following strategies are suggested:

Short-term (1-2 weeks):

• Position Management: Keep total positions at a defensive level of 30%-40%, maintaining sufficient cash to cope with potential volatility. This aligns with your previous approach of using gold as a risk control anchor.

• Key Level Operations: If Bitcoin stabilizes around $80,000 and shows volume-driven rebound signals, consider a light long position; if it breaks below this support with increased volume, decisively reduce positions and observe.

• Avoid chasing highs: The market currently lacks sustained upward momentum; any rebound may face selling pressure. Do not blindly add positions during initial rebounds.

Mid to Long-term (1-3 months):

• Watch policy milestones: The implementation of the "reciprocal tariffs" policy on April 2 will be an important time window, and the market may make directional moves after clarity emerges.

• Structural allocation: If the market completes sufficient correction, gradually establish positions in Bitcoin and high-quality mainstream coins at key support levels, maintaining a balanced portfolio of gold and crypto assets.

• Liquidity monitoring: Continuously track data from institutions like Ethena and ETF fund flows as leading indicators of market sentiment shifts.

5. Risk Warning

The main risks currently facing the market include: unexpected escalation of tariff policies, a hawkish shift in Federal Reserve monetary policy, and further internal liquidity contraction in the crypto market. Investors should remain cautious, avoid high leverage, and ensure their portfolios match their personal risk tolerance.

Disclaimer: This analysis is for reference only and does not constitute investment advice. Cryptocurrency markets are highly volatile, and investments may result in partial or total loss of funds. Please make decisions prudently according to your personal risk capacity. #Gate2月透明度报告 $BTC