Cryptocurrency markets are under immense pressure following the recent hacking of the Bybit exchange and the introduction of new tariffs by the U.S. government. Bitcoin, the leading cryptocurrency, has plunged to its lowest levels since mid-November, trading below $90,000 and logging drops exceeding 7.5% on February 25. Several factors contribute to this marked decline, leading analysts to caution against future volatility.
The recent sell-off can be attributed significantly to the Bybit hack, which saw over $1.5 billion stolen, marking it as the largest attack on the cryptocurrency sector to date. Joseph Edwards, head of research at Enigma Securities, commented on the hack’s aftermath, stating, "The market had held up well initially after this incident, but there is often a price to pay later when the immediate reaction is not instant." The security breach has exacerbated investor fears, leading to increased selling pressure.
Simultaneously, macroeconomic issues have surfaced, particularly related to the policies announced by U.S. President Donald Trump. The impending tariffs of 25% on imports from Canada and Mexico have instilled fear of trade wars and inflation among investors. Marcel Heinrichsmeier, a crypto asset analyst at DZ Bank, noted the urgency caused by these conditions, stating, "The macroeconomic situation has been the primary reason for price declines over recent hours." This has led to investors reallocaking their funds to more stable government bonds, impacting cryptocurrency’s market appeal.
Further examining the effects of the Bybit situation, not only Bitcoin suffered; Ethereum, the second-largest cryptocurrency, saw its price drop by 9.5%, reaching levels not seen since October 2024. Lesser-known altcoins like Dogecoin, Solana, and Cardano experienced declines over the week, each suffering around 20% losses. Data from CoinGecko emphasized this market-wide downturn.
Solana (SOL) also faced serious challenges, as it traded at its lowest price point in four months, contributing to the market's bearish outlook. Over the past thirty days, SOL has experienced a staggering 45% correction, and analysts now warn of potential drop risks even lower. The asset's market capitalization has slumped to $70 billion, amplifying concerns again.
The Ichimoku Cloud and the Exponential Moving Average (EMA) indicators signal strong bearish trends for Solana. Currently, SOL's price sits well below these technical lines, which indicates continued downward momentum. A brief consolidation phase had occurred, yet buyers failed to reenter the market sufficiently, maintaining the negative price structure.
Expert analyses indicate the lack of significant buying from crypto whales—those holding over 10,000 SOL—over the past month. Their diminishing numbers have reached 5,017, the lowest since December. This trend suggests these significant holders are cashing out, reinforcing selling pressure and compounding the asset's bearish sentiment.
Market indicators, including the EMA structure, reveal the short-term moving averages are crossing below long-term lines. This setup indicates strong bearish momentum; SOL must recover above key moving averages to shift sentiment. If bearish patterns persist, analysts warn it could test support levels at $133—if this support fails, prices could tumble to $120 or lower.
Prospective traders are also eyeing the $1.9 billion release of Solana tokens set for March 1, which could have significant effects on SOL's pricing strategy going forward. Although there are cautious signs from the whale behavior lately, analysts convey this is not enough to pivot market perception from negative to positive.
The cryptocurrency market is grappling with multiple uncertainties as regulatory environments shift and market mechanisms react to larger economic contexts. With the latest developments, especially the attack on Bybit, confidence among investors appears shaken, as many are cautious of reallocations during such turbulent times.
Despite earlier optimism, particularly on the heels of the Trump administration’s expected support for Bitcoin’s friendly policies, the lack of substantial moves since has resulted only in increased uncertainty. Data from LSEG indicates outflows from Bitcoin ETFs reached $644 million this month, marking the largest withdrawals since the fund’s launch.
The resulting uncertainty and negative sentiment lead to the overall bearish trend across all cryptocurrencies, with Bitcoin, which once was predicted to reach record highs near $100,000, now finds itself struggling to maintain its value amid global turbulence.
Taking all these factors together, the cryptocurrency market continues to react to internal and external pressures, and analysts predict it may face more turbulent days as entities navigate through the ramifications of the Bybit hack and shifting economic policies.