The crypto market experienced a volatile start to the week. Bitcoin surged above $102,000 during the Asian trading session, fueled by news of a 90-day pause on US-China tariffs. However, this bullish momentum proved short-lived.

The opening of the New York session saw Bitcoin sharply retract, reaching an intraday low of $100,700 and erasing most of its earlier gains. Traders adopted a cautious stance ahead of significant macroeconomic events, particularly the release of the US Consumer Price Index (CPI) data on Tuesday.

Crypto Liquidations Shake the Market

This sudden downturn triggered over $500 million in long liquidations across the crypto market. Coinglass reported nearly $200 million in Bitcoin futures liquidations alone, with Ether following closely behind at $170 million. Analyst Ali Martinez highlighted a critical liquidation risk zone around $102,700, warning that a breach could trigger up to $1.45 billion in forced liquidations. He also expressed concern that Bitcoin's chart pattern is mirroring its 2021-22 cycle—a sharp rise followed by a steep fall—raising the specter of a similar crash.

Altcoins Suffer Losses

The decline wasn't confined to Bitcoin. Dogecoin (DOGE) and Cardano (ADA) both experienced drops of around 7%, while Solana (SOL), XRP, and BNB fell by 5-6%. This sharp reversal follows a recent rally that saw Ethereum surge 40% and Bitcoin briefly surpass $104,000, amidst significant short liquidations.

Impact of US-China Tariff Rollback

The decreased risk appetite appears linked to the US-China tariff rollback. While this agreement positively impacted stock markets, it dampened the speculative trading that had driven the recent crypto rally. Futures open interest declined by $1.2 billion across major exchanges, indicating a rapid exit from leveraged positions by traders.

The Federal Reserve's Next Move

Market attention now shifts to the Federal Reserve's June meeting. BTSE COO Jeff Mei suggests the Fed's stance will be crucial; a dovish shift could stimulate economic activity and potentially boost crypto markets. Until then, however, investors maintain a cautious outlook, anticipating further volatility.

In summary, initial optimism has quickly given way to caution. Bitcoin's recent dip serves as a stark reminder of the fragility of rallies in today's macro-driven crypto environment.