Bitcoin experienced staggering declines recently, plummeting to multi-month lows on February 25, 2025, as substantial liquidity cascades rocked the cryptocurrency market. Data from Cointelegraph highlighted Bitcoin's fall to as low as $86,314 on Bitstamp, marking the lowest point since mid-November of the prior year.
Notably, the price losses throughout February were recorded at approximately 13%. Market sentiment, gauged by the Crypto Fear & Greed Index, spiraled downwards, entering the "extreme fear" territory. Reports indicated over $1.5 billion worth of liquidations across the cryptocurrency markets, with Bitcoin leading the charge through massive liquidated long positions.
Crypto investor Alistair Milne pointed out the precarious situation Bitcoin faces on hourly and daily timeframes. He noted, "Bitcoin touches oversold territory on the daily for the first time since August last year (when Bitcoin crashed to $49k)." He added, "Being oversold (or even close to) on the daily is one of the most reliable indicators of bottom/reversal territory. Only happens a handful of times per year." These observations presented some hope, though the market remained skeptical.
With the threat of sustained downward momentum, traders like SuperBro expressed caution, warning, "This is about as far as we can go keeping the near-term bull thesis intact." The notion of Bitcoin whales—individuals or entities holding large amounts of Bitcoin—came under scrutiny, with Axel Adler Jr. from the analytics platform CryptoQuant reporting on newer whales’ realized price, significantly contributing to the support level around $89,200, which had previously managed to uphold the market.
Despite the cautious sentiment among investors, entities like El Salvador and Metaplanet seized the opportunity to bolster their Bitcoin exposure. On February 24, 2025, El Salvador's President Nayib Bukele announced the country had procured seven additional Bitcoins, elevulating its total holdings to 6,088 BTC, equaling roughly $541 million based on current valuations. Bukele reassured supporters via social media, stating, "O ye of little faith," intending to quell speculation about potential capitulation under pressure from the International Monetary Fund (IMF).
Concurrently, Metaplanet, the Tokyo-listed Bitcoin treasury firm, acquired 135 BTC valued at approximately ¥1.9 billion ($12.9 million), bringing its holdings to 2,235 BTC. CEO Simon Gerovich did not shy away from ambitions, targeting quarterly yields of 35% for 2025 and another 10,000 BTC by year-end.
Conversely, the broader market sentiment remained shrouded by uncertainty following increased liquidation pressures. A staggering $1.3 billion was liquidated from the crypto markets, primarily affecting long traders of Bitcoin and Ether. Over 362,000 traders found themselves liquidated, with Binance recording the largest individual liquidation order of $20 million on BTC/USDT.
Adding to the tumult, multiple analysts flagged concerns about the future of Bitcoin's price amid significant geopolitical tensions and declining demand for spot Bitcoin ETFs. The immediate aftermath of heightened liquidation and economic uncertainty has many pondering the viability of Bitcoin’s bull market continuing. Prominent figures, including Donald Trump, faced scrutiny over unmet commitments to support the crypto industry.
Meanwhile, by February 25, analysts from across the industry continued to issue warnings about Bitcoin's pivotal price resistance levels. Agne Linge, Head of Growth at the crypto platform WeFi, stated, “The market is experiencing one of the biggest negative resets this year,” reflecting on the bearish sentiment permeated throughout the market. She indicated, though, the potential for recovery, citing favorable institutional adoption.
Arthur Azizov, CEO at B2BINPAY, echoed similar concerns, noting,