Crypto Market Slides: Bitcoin Hits 3-Month Low
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Bitcoin has faced a significant downturn, dropping to $78,363 as of Friday morning trading in London, which marks a 25% decline from its all-time high of $109,241 reached on January 20, 2025.
This sharp decrease has effectively erased most of the gains made following Donald Trump’s election victory and subsequent inauguration.
The world’s largest cryptocurrency has lost approximately 20% of its value in February alone, potentially making this the most significant monthly decline since June 2022.
Contributing to this bearish trend is a massive outflow from Bitcoin ETFs, with investors withdrawing over $2.48 billion in total net outflows until Thursday.
This marks the largest exodus from Bitcoin ETFs since their inception, highlighting a notable shift in institutional investor sentiment.
Several factors have played a role in this downturn.
Global economic uncertainty has been a significant influence, particularly following President Trump’s announcement of a 25% tariff on imports from Canada and Mexico, set to take effect on March 4.
This development has sparked concerns about potential trade wars and led to a broader risk-off sentiment in global markets, impacting cryptocurrencies alongside other risk assets.
Additionally, a major security breach at the Dubai-based Bybit exchange, resulting in the theft of approximately $1.5 billion worth of digital assets, has raised serious concerns about the security of the crypto ecosystem.
Weak US consumer confidence data and other disappointing economic indicators have further dampened investor enthusiasm for risk assets.
Technical factors have also contributed to Bitcoin’s decline.
The cryptocurrency has broken below several key support levels, including the lower part of the range established since late 2024, the annual volume-weighted average price (VWAP), and its 50-day moving average.
This indicates a clearly bearish short-term trend.
The impact of Bitcoin’s decline has been felt throughout the cryptocurrency market, with the total crypto market losing $660 billion in market capitalisation and experiencing $3.68 billion in liquidations this week alone.
Other major cryptocurrencies like Ethereum, Cardano, and Solana have also seen double-digit percentage drops.
Looking ahead, analysts are divided on Bitcoin’s near-term prospects.
Some technical analysts suggest that if the current correction continues, Bitcoin could test its next support level at $75,215.
However, others maintain that the long-term bullish trend remains intact despite the current medium-term neutral stance.
As the market navigates this period of uncertainty, investors will be closely monitoring global economic developments—particularly Trump’s trade policies—and their potential impact on risk assets.
The coming weeks will be crucial in determining whether Bitcoin can withstand these pressures or if further declines are on the horizon.
Sources: eToro, MarketScreener
