Bitcoin and Crypto Prices Tumble Amid Trade Tensions and Inflation Fears
Nearly every major cryptocurrency is bleeding red this week as Bitcoin plummeted below $85,000. The world’s largest digital asset is now trading around $84,600, marking a steep 4% decline in just 24 hours. Not exactly the moon shot crypto bros were expecting after Trump’s victory.
The selloff accelerated following Trump’s January 20 tariff announcement, triggering a 17% drop that has investors clutching their digital pearls. From its glorious peak of $109,225 after Trump took office, Bitcoin has now shed a painful 20%. If the $80,000 support level breaks, analysts warn we could see prices tumble all the way to $70,000. Ouch.
It’s not just Bitcoin feeling the pain. The entire crypto market cap shrunk by 4% after Trump’s remarks, with a staggering $765 million in liquidations over the past day. Add another $1.5 billion wiped out on February 25, and you’ve got a recipe for investor heartburn. Altcoins are following the leader downhill, naturally.
Trump’s announcement of a 25% tariff on European Union goods, set to take effect next April, has markets on edge. These global trade tensions will likely keep pressure on crypto until early spring, with any resolution potentially serving as the next big catalyst for price movement. Despite current losses, some analysts still predict Bitcoin prices could reach $92,683.35 by March next year. Traders are watching closely for signs of countries striking deals to ease the situation.
Global trade war jitters keep crypto on shaky ground as markets await diplomatic breakthroughs to relieve tariff pressures.
Institutional investors aren’t sticking around to find out what happens next. Bitcoin ETFs saw their largest one-day withdrawal since inception, with a massive $937.78 million exodus on February 25 alone. Total outflows for the week approached $1.5 billion. So much for diamond hands.
High interest rates aren’t helping matters. The Fed is expected to keep rates steady at its May meeting, with an 85% probability of no change. Traders are desperately awaiting rate cuts to boost risk appetite.
Technical analysts point to Bitcoin’s current Acceleration Phase, similar to cycles in 2013 and 2017. The cycle top isn’t expected until the second quarter of 2025, though each cycle shows diminishing returns. This pattern aligns with historical data showing that halving events typically trigger bull markets followed by significant corrections.
Market sentiment has shifted from champagne popping to nail biting. The current market volatility has already triggered over $2.1B in liquidations within a 24-hour period. The recent $1.4 billion Bybit hack only added to investor anxiety about centralized exchange security. Glassnode data indicates that short-term holdings of Bitcoin have declined significantly, with only 2.3% of Bitcoin held for a week or less. The current Bitcoin price sits at $81,685.18, representing a 1.8% drop in the last 24 hours. With macroeconomic uncertainty rising, even the most devoted hodlers are exercising rare caution.
