Bitcoin Dips Below $80K – Market Turbulence Intensifies!
By Manoj Dharra
BTC$BTC dipped to $79K on Feb 28, 2025 – the first time in 3 months! Here’s why:
A rout in Bitcoin deepened on Friday as investors rushed to safe assets in the wake of US President Donald Trump’s latest tariff threats– New 25% tariffs on Mexico/Canada & 10% on China triggered a risk-off wave, spooking investors.
The ongoing trade wars in the U.S. have intensified inflation worries, potentially influencing the Federal Reserve’s decisions on rate cuts. Higher interest rates can lead to sell-offs in riskier assets such as cryptocurrency, driving BTC prices lower.
ETF Outflows – The most recent price decline was also likely due in part to waning demand for Bitcoin exchange-traded funds. As a group, the funds have seen about $3 billion in outflows over the past 7-8 days.
Mass Liquidations – $859M liquidated in 24h, with $760M in longs, fueling the crash.
The lack of a decisive signal for another bull run has prompted investors to sit on the sideline and rotate out of cryptocurrencies amid a risk-off environment.
Ether, the second-largest cryptocurrency by market value, was down nearly 6% at $2,149.38, around its lowest since January 2024.
This tanking can be viewed as a response to macro fears on Trump’s tariffs and geopolitical uncertainty and Nvidia’s 8.5% plunge Thursday, despite strong earnings, is a worrying sign….
Altcoins in Freefall Amid Economic Uncertainty
XRP and Dogecoin led the losses, crashing over 10%. Major altcoins like Cardano (ADA) and Binance Coin (BNB) also fell at least 9%, adding to the growing bearish sentiment. Traders pointed to liquidity draining from memecoin rallies and Bitcoin ETF sell-offs as key drivers behind the downturn.
Traders are still waiting for Trump to come up with concrete steps for the sector including a Bitcoin stockpile.
Tech Check
58,000 Bitcoin options contracts worth $4.7 billion set to expire.
Bearish sentiment grows as BTC price breaks key support levels
The Bitcoin range is between $77,000–$72,000….
Meanwhile, Ethereum is also facing a major expiry event, with 526,000 options contracts worth $1.14 billion expiring.
Outlook: Bearish Signals Intensify
The market reaction to these developments has been swift, with investors seeking safety in U.S. Treasuries, pushing yields to three-month lows.
Lower yields typically signal risk aversion and could indicate that institutional investors are positioning for a downturn. The mix of weakening tech stocks, cautious bond markets, tariff threats, and bearish crypto signals suggests that markets could face more downside risk in the near term.
Investors are anxiously awaiting the release of the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index. Expectations are for a 0.3% monthly rise and a 2.5% annual increase.
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