TLDR
- Bitcoin fell below $90,000 to around $87,630, breaking out of an ascending broadening wedge pattern
- Trump’s tariff plans on Canada and Mexico contributed to the market decline
- A $1.5 billion hack on Bybit platform added pressure to the crypto market
- Bitcoin ETFs experienced over $500 million in outflows for the second consecutive week
- Altcoins suffered steep declines with Ethereum falling to $2,375 and Solana dropping nearly 15%
Bitcoin and the broader cryptocurrency market experienced a sharp decline on February 25, 2025, with Bitcoin dropping below the $90,000 mark for the first time since November. The downturn comes amid multiple factors affecting market sentiment, from macroeconomic pressures to security concerns within the industry.
The price of Bitcoin dropped to $87,630, marking a 6.78% decline after breaking out of what analysts call an “ascending broadening wedge” pattern.
BTC Price
This technical formation is typically considered bearish by market watchers. According to Matrixport analysts posting on X, the likelihood of a deeper decline is increasing, particularly concerning since this break is happening during a period of low trading activity.
#Matrixport Today 📈 – Feb 25 2025⬇️#Bitcoin Breaks Key Pattern: Caution Warranted Amid Low Trading Activity‼️#Crypto #BTC #CryptoFinance #CryptoMarket pic.twitter.com/rnIlXpWUir
— Matrixport Official (@Matrixport_EN) February 25, 2025
The low trading volume means there may be limited demand for buying the dip, potentially allowing prices to fall further before finding support. While many analysts still predict Bitcoin prices will rise later in the year, the current technical breakdown has made many more cautious about short-term prospects.
The decline wasn’t limited to Bitcoin. Ethereum, the second-largest cryptocurrency, fell below its key support range of $2,600 to $2,800, dropping to $2,375. Analysts at Spot On Chain warned that Ethereum “could be heading for its worst February if it drops below $2,400.” Historically, February has been a bullish month for Ethereum, with only one red month recorded in 2018.
Other altcoins suffered even steeper declines. Solana (SOL) experienced one of the largest drops among top assets, falling 14.85% to $143.13. XRP slumped 7% to $2.21, though it remains up 6% for the year despite falling 29% over the past month. Cardano (ADA) also saw a major decline, losing 10.96% and trading at $0.6859, while BNB posted somewhat lower losses at 6.55%, trading at $615.13.
The market-wide sell-off resulted in nearly $800 million in leveraged positions being liquidated over a 24-hour period. Long positions accounted for about $600 million of these liquidations, while short positions made up approximately $200 million, showing the extent of market participants being caught off guard by the rapid price movement.
Trump’s Tariffs
One of the main factors contributing to the decline appears to be President Donald Trump’s confirmation that his administration will impose tariffs on imports from Canada and Mexico. These measures, set to take effect on March 4, include a 25% tariff on all Canadian and Mexican imports, along with a 10% levy on Canadian energy resources.
Trump reaffirmed his position in a statement on February 24, saying: “The tariffs are going forward on time, on schedule.” His administration has cited concerns over illegal immigration and fentanyl trafficking as justification for the trade restrictions.
The tariff announcement sent shockwaves through various markets, with U.S. technology stocks also feeling the pressure. The Nasdaq Composite closed 1.2% lower on Monday, marking its third consecutive day of losses. This tech market malaise appears to have filtered through to cryptocurrencies, which are increasingly moving in alignment with U.S. stock markets.
Adding to the pressure on cryptocurrency markets was a high-profile security breach at Bybit, a Dubai-based cryptocurrency platform. Approximately $1.5 billion worth of digital assets were stolen in the hack last week, raising concerns about security within the cryptocurrency ecosystem and potentially dampening investor confidence.
ETF Flows
Institutional investment flows have also turned negative. U.S. spot Bitcoin exchange-traded funds (ETFs) have experienced their second consecutive week of outflows exceeding $500 million leading up to February 21. The majority of these outflows came from Grayscale’s GBTC fund, which saw $60.08 million exit as it continued its outflow streak following its conversion from a trust structure. Bitwise’s BITB and Fidelity’s FBTC also contributed to the negative momentum with outflows of $16.58 million and $12.47 million, respectively.
The current market decline stands in stark contrast to the bullish sentiment that followed President Trump’s election victory in November. At that time, Bitcoin and other digital assets surged on hopes that the new administration would adopt crypto-friendly policies. However, this optimism has waned in recent weeks as traders have become increasingly focused on global macroeconomic and geopolitical developments.
The combined effect of regulatory headwinds, security breaches, and liquidation cascades has increased market volatility to levels not seen in months. Traders now remain on edge as they brace for additional market fluctuations ahead of the March 4 tariff implementation deadline.
Analysts believe that continued volatility is likely as investors reassess risk in response to shifting trade policies and global economic uncertainty. The evolving tariff situation, along with potential retaliatory measures from Canada and Mexico, could further impact digital asset markets in the coming weeks.
Bitcoin is now down approximately 4% so far in 2025 and more than 14% over the past month, erasing gains from earlier in the year when prices hit all-time highs above $100,000.
The current price action suggests that cryptocurrency markets remain highly sensitive to broader economic factors despite hopes of increased independence from traditional financial markets.
