TLDR
- Bitcoin has fallen below $80,000, erasing gains made since Donald Trump’s election
- The 27% decline from January’s all-time high of $109,000 coincides with $2.7 billion in ETF outflows
- Market uncertainty stems from Trump’s proposed 25% tariffs on imports from Canada, Mexico, and EU
- The $1.4 billion Bybit exchange security breach has further damaged market confidence
- Historical data shows Bitcoin has experienced 16 significant corrections with declines ranging from 30-85%
Bitcoin has dropped below the $80,000 mark for the first time since November 2024. The world’s largest cryptocurrency fell to around $79,800 on February 28, marking a 6% decline in just 24 hours.
This price drop has erased the gains made following Donald Trump’s election victory. Many traders had been watching the $82,000 level as possible support, but with that barrier now broken, expectations are shifting toward a potential drop to the $70,000 range.
BTC Price
The decline represents a 27% pullback from Bitcoin’s all-time high of $109,000. That record was set in January 2025, shortly after Trump’s inauguration.
Market data shows the total amount of Bitcoin 12-hour liquidations has reached $327 million. Long positions have taken the heaviest hit according to Coinglass data.
U.S. spot Bitcoin ETFs recorded $275 million in net outflows on February 27 alone. This brings the total outflows over the past week to $2.7 billion, based on SoSoValue data.
February has seen investors pull more than $2 billion from spot Bitcoin ETFs. This marks the most substantial weekly outflows since these investment vehicles were first introduced.
The current downturn mirrors a similar 33% drop that occurred between March and August 2024. That previous correction took 144 days before Bitcoin reached a new high in November.
Bitcoin has now dropped below its 200-day moving average. This technical indicator is often watched by traders to assess the strength of long-term trends.
Macroeconomic Uncertainty
The primary cause of the decline appears to be macroeconomic uncertainty. Trump’s proposed 25% tariffs on imports from Canada, Mexico, and the European Union have alarmed investors.
These tariff proposals have stoked worries that growing prices may raise inflation. While some analysts believe the tariffs would boost domestic manufacturing, market sentiment has clearly shifted to risk aversion.
Capital has been flowing into safe-haven assets like the U.S. dollar and Treasury bonds. Gold ETFs have seen inflows rise, suggesting investors are moving toward more traditional safe investments.
The market pullback comes as traders reassess expectations for Federal Reserve interest rate cuts. Persistent inflation data has reduced the likelihood of immediate monetary easing.
Higher interest rates typically weigh on risk assets like Bitcoin. The cryptocurrency had rallied in late 2024 partly due to expectations of a looser monetary environment.
ByBit Hack
Adding to the market troubles, a security breach on the Bybit exchange last week resulted in a $1.4 billion theft. This represents the largest crypto theft in history and has raised serious concerns about digital asset security.
Some analysts have linked this major security breach to increased selling pressure in the market. The incident brings the total money lost in crypto hacks for 2025 to $1.6 billion, nearly matching 2024’s full-year total of $2.2 billion.
Despite these challenging market conditions, there are some signs of continued retail optimism. Sentiment’s February 28 social media analysis revealed a spike in references to “buy the dip.”
However, historical patterns indicate that excessive optimism during downturns often precedes further declines. BitMEX co-founder Arthur Hayes warned that Bitcoin remains in a downtrend, forming lower lows.
Hayes predicts another sharp drop below $80,000 over the weekend. He suggests Bitcoin could test the $70,000 to $75,000 range if Trump fails to advance his budget plans.
We are making lower lows in this current wave. I was tempted to add risk this morning, but looking at this price action I think we have one more violent wave down below $80k, most likely over the weekend, then crickets for a while. Hold on to your butts! pic.twitter.com/e6nshZejAb
— Arthur Hayes (@CryptoHayes) February 28, 2025
On-chain data indicates that most selling pressure is coming from newer investors. Wallets that have been holding Bitcoin for extended periods remain relatively inactive.
Historically, Bitcoin has experienced at least 16 major corrections from all-time highs. These declines have ranged from 30% to 85% before eventually recovering.
More severe historical downturns, such as the 78% plunge in 2021-2022 and the 84% drop in 2018, took multiple years before fresh highs were reached.
Traders are now closely watching support levels around $75,000. They’re also monitoring ETF flows for any signs of renewed demand that might signal a potential recovery.
With the current market conditions and various pressures at play, Bitcoin’s short-term outlook remains highly uncertain.
