Bitcoin’s 2% tumble triggers widespread altcoin selloff, but seasoned traders remain surprisingly optimistic amid market turbulence

Bitcoin kicked off the week with a disappointing 2% decline, dragging most of the cryptocurrency market down with it. Major altcoins including XRP, Solana, Cardano, and Dogecoin experienced even steeper drops of up to 5%, while BNB Chain bucked the trend with a 3% gain.

The broader crypto market has remained stagnant since last week’s selloff, which was triggered by concerns over U.S. tariffs and growing recession fears. Bitcoin briefly touched resistance at $84,000 on Sunday before retreating to around $83,300 during Asian trading hours on Monday.

Despite the current downturn, many investors maintain a “buy the dip” mentality, viewing this correction as a potential opportunity rather than a reason for alarm.

“Trading volume has increased for altcoins after Trump’s World Liberty Financial bought MNT and AVAX, the latter of which was also part of an ETF application by VanEck,” Nick Ruck, director at LVRG Research, said in a Telegram message. “This may be a sign that traders and investors will focus on altcoins in the short term for better gains compared to large-cap coins like Bitcoin or Ethereum.”

Some analysts attribute the current sell-off to sophisticated hedge fund strategies unwinding their positions.

“The current belief is that the current sell-off is entirely driven by the massive ‘multi-strat’ hedge fund strategies that have dominated the macro space,” said Augustine Fan, Head of Insights at SignalPlus.

These multi-strategy trades often involve hedge funds using various tactics across asset classes. In Bitcoin’s case, a popular approach is the “basis trade,” where funds purchase spot Bitcoin (often through ETFs) while simultaneously shorting Bitcoin futures to profit from price differences.

When these trades become less profitable due to market shifts, funds exit their positions by selling Bitcoin and ETF shares in large quantities, potentially amplifying the current downturn, especially amid recent tariff-related volatility.

Despite these short-term challenges, market sentiment remains cautiously optimistic.

“Equity valuations outside of the major large caps are relatively contained vs historical averages, and economic hard data is likely to outperform the rapid deterioration in soft data, so market consensus is that this remains a ‘buy the dip’ market while we work through the tariff volatility,” Fan added.

As the market navigates this period of uncertainty, many traders are keeping a close eye on the $84,000 resistance level for Bitcoin, which could signal a potential upward movement if successfully breached.