Bitcoin plunged below $89,000, and Bitfinex analysts claim the cryptocurrency has reached a 'critical threshold.' Since February 24, the price has fallen more than 8%, hitting its lowest point since the end of November, and the total crypto market capitalization has fallen below $3 trillion. The decline coincided with the US President Donald Trump's (Donald Trump) announcement that his promised 25% tariffs on imports from Canada and Mexico will come into effect 'on time and on schedule.'
1-day BTC/USDT chart. Source: Cryptocurrency screener Cryptovizor
Bitfinex analysts in their Alpha report from February 24 noted that Bitcoin has been trading in a narrow range from $91,000 to $102,000 for almost 90 days. Such a prolonged consolidation period is rare for a cryptocurrency, which is usually known for its sharp price swings. 'The lack of momentum for a confident breakout has led to a slowdown and stagnation of almost all major crypto-assets,' the experts write.
The drop triggered massive liquidations: in one day, the market lost $1.34 billion, according to CoinGlass data. The lion's share of the losses was recorded on long Bitcoin positions - more than $525 million in one day. This means that traders who were betting on growth were hit the hardest.
Trump's announcement echoed on February 24 at a press conference with French President Emmanuel Macron (Emmanuel Macron). He confirmed that tariffs of 25% on imports from Canada and Mexico, as well as 10% on imports from China and Canadian energy, will be enacted as planned. Trump first announced these measures on February 1, and the market reacted nervously already then. Now that the timing is confirmed, investors are revising their strategies once again.
Bitfinex links the stagnation of the crypto market to traditional finances. 'Bitcoin is increasingly correlated with classical markets, and their stagnation is due to macroeconomic uncertainty,' the analysts note. It's no surprise that news about tariffs that could hit global trade makes market players wary.
The mood in the crypto sphere has also worsened. The Crypto Fear & Greed Index fell to 25 out of 100 on February 25, which corresponds to the 'extreme fear' level. Just yesterday, it was at 49 - the neutral zone. Such a sharp drop is a signal that investors are losing confidence. The last time this level of fear was recorded was on September 7th, when Bitcoin dropped to $54,000 after a 7% decline in two days.
Fear and Greed Index. Source: alternative.me
The head and founder of MN Consultancy Michaël van de Poppe (Michaël van de Poppe) commented on the situation on X: 'I talked about this yesterday: Bitcoin needs to take all the liquidity. This is what's happening now. Absolute bottom? $83–87k. After that, an upward reversal should begin. Current sentiments are extremely negative, so this is a likely scenario.'
1-day BTC/USD chart. Analysis: Michaël van de Poppe