BTC Bloodbath: 3 Reasons the Crypto Darling Took a 25% Tumble

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BTC Bloodbath: 3 Reasons the Crypto Darling Took a 25% Tumble 🤯

BTC Bloodbath: 3 Reasons the Crypto Darling Took a 25% Tumble

Oh, the humanity! Bitcoin price took a nose dive, plummeting as low as $78,256 on Friday, closing February with a whopping 25% loss. It seems retail traders’ panic selling was the culprit behind this latest BTC price downturn 🚨.

Bitcoin (BTC) Hits Lowest Level Since November 2024 📉

Bitcoin price extended its February losses further on Friday, weighed down by political and economic turbulence 🌪️. The majority of the bearish momentum stemmed from developments within the Trump administration, shaking investor confidence in risk assets 😬.

In the last quarter of 2024, BTC price outperformed major financial assets as Trump’s pro-crypto stance fueled bullish sentiment 🚀. His inauguration-day launch of a memecoin further amplified gains, driving Bitcoin price to new all-time highs in January 🎉.

However, after posting double-digit growth in Q4 2024, BTC price has faced intense sell pressure in February, with multiple macroeconomic and geopolitical factors fueling the downturn 📊.

BTC price dropped 8% on Friday, briefly hitting $78,256 on Binance—its lowest level in over 120 days. Having opened February at $102,429, BTC price has now plunged 25%, as it closed the month just below the $84,000 mark, as depicted in the TradingView chart above 📊

Why Did Bitcoin Price Plunge 25% in February 2025? 🤔

Beyond a “sell-the-news” event following Trump’s inauguration, several new bearish catalysts emerged throughout February, further weighing on Bitcoin price action 📰.

1. DeepSeek’s Emergence Unsettles AI Markets, Triggering Sell-Offs 🤖

The AI sector’s turmoil has sent shockwaves across financial markets, contributing to BTC price volatility 🌊. DeepSeek, a major Chinese AI player, has challenged U.S.-based firms like OpenAI, raising fears of a prolonged AI arms race 🚀. This uncertainty escalated following NVIDIA’s positive earnings report on February 27, which paradoxically triggered a rapid sell-off in tech stocks 📉.

2. Elon Musk’s D.O.G.E. Oversight Clashes With U.S. Regulators 🚫

Elon Musk’s new role as head of the Department of Government Efficiency (D.O.G.E.) has stirred significant controversy, contributing to market instability 🌪️. Tensions between Musk and key agencies such as USAID, the U.S. Treasury, and the SEC have intensified, leading to investor uncertainty 🤔.

Financial markets have overheated as regulatory battles escalate, further undermining confidence in risk assets 🔥. The evidently contributed to Bitcoin’s 25% price dip in February 2025 📊.

3. Trump’s Tariffs on Canada and Mexico Trigger Panic Selling 🚨

Trump’s surprise announcement of 25% tariffs on imports from Canada and Mexico sent shockwaves through financial markets, prompting investors to retreat from volatile assets 🌊. Following the hotter-than-expected February 13 CPI report, inflation fears surged, exacerbating risk-off sentiment 📊.

Julien Bittel, Head of Macro Research at Global Macro Investor (GMI)  also echoed this sentiment in a recent post on X 📱.

“Everything happening in markets right now, especially in crypto, is a direct consequence of the tightening of financial conditions in Q4 last year.

When financial conditions tighten, liquidity gets drained, and economic surprises start to slow.”

  • Julien Bittel, Head of Macro Research at Global Macro Investor (GMI), Feb 28, 2025

While BTC’s 25% decline in February aligns with tightening trends in global financial markets, on-chain data suggests that retail traders were the primary sellers during the latest downturn 📊.

Santiment’s Daily Active Addresses (DAA) metric, which tracks unique addresses engaging in transactions, confirms increased retail sell pressure 📈. BTC recorded 515,000 active addresses on February 23, but following Trump’s tariff announcement, this number surged dramatically 🚀.

For context, BTC’s DAA has exceeded 880,000 daily transactions since February 25, reaching a new 2025 peak of 882,000 on February 27, before settling at 875,000 on Friday 📊. Such heightened activity during a downtrend strongly suggests that retail traders are driving the sell-off, applying downward pressure on Bitcoin price 📉.

With BTC price consolidating near 120-day lows, investors are closely watching key support levels 🔍. If selling pressure persists, Bitcoin price could test the $75,000 level in the coming days 📊. However, a potential rebound could emerge if macroeconomic conditions stabilize or institutional inflows resume 🚀.

For now, retail-driven selling, geopolitical uncertainty, and inflation fears remain dominant themes shaping BTC price action in early 2025 🌪️.

BTC Price Forecast: Bulls Risks Deeper Correction Below $80K as More Sell Signals Emerge 📊

Bitcoin price forecast charts show BTC struggling near $84,344 after an extended downtrend, with sell signals intensifying 📉. The Bollinger Bands have widened, indicating increased volatility, while Bitcoin trades below the midline at $93,607 📊.

The Top Bottom Indicator recently flashed a sell signal, mirroring the previous instance in January that led to a steep correction 📊. If history repeats, Bitcoin could extend losses further 📉.

However, Bitcoin’s price has yet to break decisively below the lower Bollinger Band, indicating potential for a relief bounce 🌈. In the near-term, if BTC price holds above $83,500, bullish momentum could push it back toward $90,000 🚀. However, failure to reclaim $86,000 could trigger another decline toward $80,000, especially as bearish sentiment is expected to intensify as Trump’s tariffs on Canada and Mexico take effect on March 1 📆.

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2025-03-01 03:56