Bitcoin, the leading cryptocurrency, has seen its price drop below US$ 90,000 for the first time since November 2024. On February 25, 2025, Bitcoin traded around $87,700, marking a significant decline of about 8.11% within just 24 hours. This turbulent market movement is seen as part of the broader repercussions of newly imposed tariffs on imports by former U.S. President Donald Trump, which have created waves across various financial sectors.
This sharp decline has not only affected Bitcoin but has also led to considerable losses for investors, with Ethereum and other altcoins like Solana and XRP suffering declines of over 10%. An astounding $1.4 billion worth of crypto positions were liquidated globally, according to CoinGlass, underlining the extent of panic over the U.S. Trade policy and market stability. Beto Fernandes, an analyst at Foxbit, noted, "The stress around U.S. trade policy does not affect Bitcoin's fundamentals,” highlighting the belief among some analysts like himself who see these declines as cyclical rather than catastrophic.
The market dynamics have also been influenced by the recent hack of Bybit, which resulted in the theft of approximately $1.5 billion worth of Ethereum. Adrian Przelozny, the CEO of Independent Reserve, commented, "The uncertainty linked to U.S. tariffs and the recent Bybit hack dampens investor sentiment," indicating how internal and external factors combine to influence market navigation amid political uncertainties. This major breach added to fears about the security of cryptocurrency exchanges and the resilience of Bitcoin as institutions continue to navigate volatile waters.
Market analysts background this survival instinct of Bitcoin to historical price swings. Raoul Pal from Global Macro Investor stated, "This current decline seems to follow the 2017 Bitcoin market structure," referencing how Bitcoin experienced repeated corrections after notable highs during previous cycles. The cryptocurrency market often moves in cycles, each presenting unique opportunities and pitfalls. Many see the swift volatility as natural market behavior, possibly giving rise to future gains.
Investors now face the question: Is this downturn truly alarming or merely part of the expected ebb and flow of the market? Relying on historical data, some strategists assess Bitcoin's potential for recovery, urging long-term investors to take this as an investment opportunity. Raymond Nasser, co-founder of Arthur Inc., suggested, "If you're considering investing, now might be the right time to accumulate BTC,” forecasting opportunities to acquire BTC at lower prices.
Further complicate negotiations, Trump's tariffs on products from Mexico and Canada could increase inflation pressures, potentially leading to stricter monetary policies. These moves may directly correlate with the price of Bitcoin and other cryptocurrencies. The market's response to external pressures, such as the anticipated impact of political instability and heightened tariffs, plays strongly against Bitcoin's trading positions.
Looking at market averages, Rafael Bonventi of Bitget suggested, “The current medium price range of BTC remains around $70,000 to $75,000, marking the area traders should focus on for potential gains during recovery phases.” This indicates long-term investors should remain watchful for rebound opportunities even as short-term waves cause priced turbulence.
Esteemed analysts urge caution and strategic planning as the cryptocurrency market oscillates between highs and lows. Investors are wary, not only of economic policies impacting their holdings but also of technical and operational weaknesses within the crypto exchanges themselves.
With predictions of Bitcoin possibly returning to the $200,000 threshold later this year, the market's climate appears unpredictable. Whether influenced by global trade or local shifts, Bitcoin’s latest plunge may offer just the opportunity savvy investors are waiting for.
For now, the focus on Bitcoin remains strong, urging both cautious strategies for investment and optimism for potential eventual gains. The road remains steep for the world's biggest cryptocurrency as it navigates through this tumultuous phase.