The price of Bitcoin (BTC) fell from $95,930 to $86,010 between February 24 and February 25, reaching its lowest point since November 2024. This unexpected decline of 10.7% resulted in more than $760 million in leveraged long liquidations, raising traders’ worries about the durability of the $90,000 support level, which had been stable for three months.
To assess whether Bitcoin’s bullish trend has truly ended, it’s crucial to evaluate the primary factors contributing to this recent drop. Some analysts attribute the decline to $516 million in net outflows from spot Bitcoin exchange-traded funds (ETFs) on February 24. However, this reasoning neglects the fact that in the four days prior, total outflows hit $553 million while Bitcoin stayed above $95,500.
Investor worries about global growth and Trump tariffs lead to sell-off
Concerns regarding global economic growth seem to be the primary catalyst for the recent sell-off in risk markets. This was particularly evident after US President Donald Trump confirmed intentions to impose tariffs on imports from Canada and Mexico, set to start in March after a month-long postponement.
US 10-year Treasury yield (left) vs. DXY Index (right). Source: TradingView / Cointelegraph
Yields on the US 10-year Treasury dropped to their lowest level in three months, reflecting robust investor demand for safe-haven assets. Meanwhile, the US dollar weakened against a range of global currencies, illustrated by the DXY index’s fall to 106.30 on February 25, also a three-month low.
President Trump contended that the US has been “taken advantage of” by foreign nations due to unfair trade practices, including value-added taxes on North American goods. The market responded negatively to this announcement, and Brown Brothers Harriman’s senior strategist Elias Haddad cautioned that “red flags are emerging for the US economy.”
Mark Cudmore, a macroeconomic analyst at Bloomberg News, noted that “the new US administration isn’t yet meeting our pro-growth expectations” and cautioned that “US policies may be starting to inflict real economic damage.”
A declining trust in the US as the predominant economic power is often regarded as a downside risk to global growth. Other major assets, including Nvidia (NVDA), Tesla (TSLA), Palantir (PLTR), and Broadcom (AVGO), have similarly experienced price drops since February 21.
Nvidia, Tesla, Palantir, Broadcom vs. BTC/USD. Source: TradingView / Cointelegraph
This strong correlation indicates that Bitcoin is still perceived as a risk-on asset, moving in alignment with the technology sector, which heavily relies on growth and does not typically provide dividends. Nevertheless, particular events in the cryptocurrency market may have led Bitcoin traders to decrease their exposure.
OKX settlement tarnishes Bitcoin’s image, complicating strategic reserve approvals
On February 24, OKX reached a settlement with the US Department of Justice, agreeing to pay $500 million in fines, mainly derived from fees gained from institutional investors. Reports suggest that the exchange encouraged individuals to submit false information to circumvent regulatory protocols, enabling over $5 billion in suspect transactions and criminal proceeds.
Although not directly tied to Bitcoin, this incident casts a shadow on the US regulatory landscape, impacting perceptions of strategic cryptocurrency reserves. More crucially, nation-states and pension funds frequently struggle to differentiate Bitcoin from illicit financial activities involving digital assets, predominantly stablecoins. Consequently, the OKX case bolstered the image of Bitcoin as a high-risk investment rather than a safeguarding tool.
There is limited indication that Bitcoin’s price will dip below $86,000, as governments are urgently trying to mitigate a potential economic downturn, prompting central banks to consider stimulus measures. While the initial response might be to reduce exposure to risk assets, investors also worry about currency dilution as the monetary base expands.
Therefore, Bitcoin’s stringent monetary policy and resistance to censorship are expected to endure. However, predicting whether a rebound above $95,000 will occur in days or weeks remains uncertain.
This article is for general informational purposes only and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
