March 4 Market Recap: U.S. Stocks Suffer Heavy Losses While Cryptocurrencies Show Resilience
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March 4 Market Recap: U.S. Stocks Suffer Heavy Losses While Cryptocurrencies Show Resilience
The bottoming process is underway.
Navigating Web3 tides with focused insightsAuthor: TechFlow
U.S. Equities: Market Confidence Completely Collapses on Day Four of the War
Tuesday marked another dismal trading day on Wall Street.
The Dow Jones Industrial Average plunged 403 points (–0.83%) to close at 48,501; the S&P 500 fell 0.94% to 6,816; and the Nasdaq Composite dropped 1.02% to 22,516.
But numbers alone fail to capture the day’s sheer volatility.
During intraday trading, the Dow briefly tumbled 1,200 points (–2.6%), the S&P 500 slid as much as 2.5%, and the Nasdaq plunged 2.7%—the most severe intraday selloff since early February.
The market behaved like a spooked bird: any minor development triggered massive selling. With the U.S.-Iran war entering its fourth day, Iran closed the Strait of Hormuz, sending oil prices soaring another 8% and investor panic to new highs.
Energy markets spun completely out of control.
WTI crude surged $5.82 (+8.2%) to $77.05 per barrel; Brent crude rocketed $6.09 (+7.8%) to $83.83 per barrel.
This was the largest single-day gain since February. Even more alarming: oil prices have surged over $17 from last Friday’s $66 level—a near 26% rise.
The Strait of Hormuz—the critical chokepoint for 20% of global oil supply—remains effectively shut. Iran has not only blockaded the strait but also begun attacking energy infrastructure across the Middle East, including oil fields and tankers in Saudi Arabia and the UAE.
On Tuesday afternoon, Trump posted a statement on Truth Social: “Under any circumstances, the United States will ensure energy flows freely to the world.” He pledged that the U.S. Navy would escort tankers through the Strait of Hormuz.
This statement briefly eased market panic—oil retreated from its intraday peak, and equities narrowed their losses from 2.5% down to roughly 1%.
Yet the problem remains dire: If oil stays above $80, inflation will spiral out of control—and expectations for Fed rate cuts will vanish entirely.
Tuesday was truly a “bloodbath”: all 11 sectors of the S&P 500 closed lower—no safe havens remained.
Hardest-hit sectors:
- Materials plummeted 4.5%, the largest single-day drop since April 2025. Lithium giant Albemarle plunged 7%; copper miner Freeport-McMoRan fell 4%; gold producer Newmont dropped 7%.
- Industrials fell over 2%. Caterpillar declined 3.98%; Boeing slid 2.52%.
- Healthcare and Consumer Staples each fell over 2%.
Only bright spots: Target rose 3%, buoyed by an upside Q4 earnings report; CEO noted “a strong sales rebound in February.” Best Buy surged 9%, despite unexpectedly weak holiday-season sales—its optimistic Q1 guidance lifted sentiment.
Tech stocks continued to collapse: Nvidia fell 1.3%; Tesla dropped 2.7%; software stocks were hammered further—MongoDB was downgraded to Neutral by Baird amid AI-related concerns, falling over 40% year-to-date.
The VIX Volatility Index spiked to 25.16 on Tuesday, the highest since November last year.
What does this number mean? It signals market expectations of extremely high equity volatility over the next 30 days. A VIX above 25 is typically viewed as the “fear” zone; above 30 indicates “extreme fear.”
Even more troubling: Market expectations for the war’s duration are worsening. Early Tuesday, Trump warned: “This conflict could last four weeks.”
Four weeks? That’s far longer than the initial market assumption of a “brief, decisive engagement lasting just days.” If the war drags on for a full month, oil could breach $100/barrel, inflation could spin completely out of control, and the Fed may not only abandon rate cuts—but be forced to hike instead. That would spell doom for equities.
Gold Plunges 4%: Dollar Strength Reverses Safe-Haven Flows
Surprisingly, gold crashed on Tuesday.
Spot gold tumbled 3.7% in a single day—from a high of $5,400 to ~$5,148—the largest drop since January 30’s $600 plunge.
Silver fared even worse, collapsing 6%. Platinum plunged 10%; palladium dropped 7%.
Why did safe-haven assets fall? Because the dollar strengthened.
The U.S. Dollar Index surged Tuesday, breaking above 100—the first time since May last year. When the dollar strengthens, dollar-denominated gold and silver fall in price.
Investors rushed into dollars—the ultimate global safe-haven asset. By comparison, traditional safe-haven assets like gold and silver became “liquidity sacrifices”: during panic, investors sell anything liquid to raise cash.
Crypto: Resilience Amid Chaos
This was today’s most surprising story.
Against the backdrop of plunging equities, collapsing gold, and a surging VIX, Bitcoin demonstrated remarkable resilience.
Per CoinGecko data, Bitcoin edged up to ~$69,413 on Tuesday, posting a +5.8% 24-hour gain—completely reversing the equity market’s downward trajectory.
Ethereum performed strongly too, holding steady near $2,000. Solana, Cardano, and other major altcoins held firm.
Total crypto market capitalization stabilized at $2.41 trillion, rising 0.9% over 24 hours. 24-hour trading volume hit $123 billion—indicating ample liquidity.
Bitcoin’s market cap reached $1.36 trillion, commanding a 56.7% market share—evidence that capital is flowing toward Bitcoin as the “crypto safe haven” amid market turmoil.
Why is crypto holding up so well?
This performance defies conventional wisdom. Historically, during geopolitical crises, crypto has tumbled alongside tech stocks—both categorized as “high-risk assets.”
This time is different. Several key factors underpin crypto’s strength:
The “digital gold” narrative is resurging.
Gold’s crash ironically reinforces Bitcoin’s “digital gold” narrative.
The flaw with traditional gold: It remains vulnerable to USD strength. When the dollar rises, gold falls—because it’s priced in dollars.
Bitcoin differs. Bitcoin is a truly borderless currency—it isn’t pegged to any single fiat currency and doesn’t automatically depreciate when the dollar strengthens.
Against the backdrop of Middle East instability and accelerating de-dollarization narratives, this characteristic is being newly recognized.
Long-term holders have stopped selling.
On-chain data shows long-term holders (wallets holding BTC for over 365 days) have largely ceased selling.
In early February, 30-day rolling net outflows from long-term holders peaked at 243,737 BTC. By March 1, that figure had plunged to 31,967 BTC—a staggering 87% decline.
What does this mean? Panic selling has ended; the market is bottoming.
Mining pressure subsides.
Selling pressure from miners has also eased dramatically. Miner net outflows peaked at 4,718 BTC on February 8—but fell to just 837 BTC by March 1.
Although negative hash rate growth (due to some miners shutting down rigs) is concerning, analysts note: Miners aren’t capitulating—they’re executing strategic portfolio diversification.
Whales accumulate quietly.
“Super whales” holding 100,000–1,000,000 BTC added ~14,000 BTC between February 19–20—and have sold none since.
“Small whales” holding 1,000–10,000 BTC began accumulating on February 25, increasing holdings from 4.22 million BTC to 4.23 million BTC.
Smart money is buying against the tide.
Amid widespread pessimism, Fundstrat’s star analyst Tom Lee issued an optimistic forecast.
On Wednesday, Lee told CNBC: “The worst of the selloff will happen this week. I expect March to be a ‘bullish month’ for equities.”
Lee added on social media: “We understand war headlines are unnerving investors—but we anticipate equity gains in March, led by the MAG7, software stocks, and cryptocurrencies (BTC and ETH).”
Lee’s logic: Crypto and tech stocks have already undergone sharp corrections and may now be in their “final bottoming phase”—setting the stage for a rally in April.
Historical data supports Lee’s view. Wells Fargo data shows: The S&P 500 typically rebounds within two weeks after major geopolitical conflicts—and averages a 1% gain three months later.
Bitcoin Technical Analysis: $65,000 Is the Key Level
Bitcoin is currently consolidating in the $65,000–$68,000 range.
Key support levels:
- $65,000: A break below could trigger a selloff targeting $64,600—or even $64,000.
- $63,000: The absolute floor—if breached, $60,000 looms.
Key resistance levels:
- $68,000: Tested multiple times; a breakout could spark FOMO.
- $70,000: A psychological barrier—breaking above opens the path to $74,000–$75,000.
Technical analyst Michael Van De Poppe stated: “Bitcoin must hold $65,000. Once it does, breaking above $70,000 becomes merely a matter of time.”
Key Question: How Long Will the War Last?
The market now focuses on just one question: How long will the war last?
Trump warned Tuesday: “This conflict could last four weeks.”
If it does last four weeks: Oil will surge past $100; inflation will spiral; the Fed may be forced to hike—and equities face deeper crashes.
If it lasts only days: Oil retreats; inflation eases; equities rebound—and crypto may rally alongside.
Fundstrat’s Tom Lee bets on the latter: “The worst selloff ends this week; March will be a bullish month.”
Last week, legendary investor Steve Eisman said: “I won’t change a single trade because of this conflict.”
But the market clearly disagrees.
The VIX spike, materials-sector crash, and gold collapse—all scream: “We’re scared!”
The sole exception is crypto.
Against plunging equities and collapsing gold, Bitcoin displayed astonishing resilience. This signals: The crypto market is maturing—evolving from a “pure risk asset” into an “alternative safe-haven asset.”
Fear index at 10/10, long-term holders halting sales, whales accumulating quietly—all historical indicators point to one conclusion: bottoming is underway.
Will Bitcoin rebound above $70,000 in March?
The answer will emerge in the coming days.
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