Alisa Davidson
Published: March 07, 2025 at 12:10 pm Updated: March 07, 2025 at 9:05 am
Edited and fact-checked:
March 07, 2025 at 12:10 pm
In Brief
Bitcoin fell below $80,000 and recovered to $90,000 as a $1 trillion crypto sell-off raised concerns of further declines and a potential market collapse.
Bitcoin has tumbled below $80,000, clawing its way back to $90,000 as a brutal crypto sell-off wipes out a staggering $1 trillion from the global market — sparking fears that the worst may still be ahead.
The steep slide—a 25% plunge from Bitcoin’s record high of nearly $110,000—has rattled even seasoned investors, with insiders sounding the alarm over suspected “price suppression” tactics.
With analysts urging traders to resist the temptation to “buy the dip,” the focus has shifted to uncovering the root causes of this crypto bloodbath — and whether this correction could spiral into a catastrophic, full-scale market meltdown.
What Went Wrong?
Announcing a sweeping 25% tariff on imports from Mexico and Canada, set to start on Tuesday, President Trump stunned world markets. The unexpected decision quickly turned investor focus from high-risk assets like cryptocurrency onto the wider economic effects of rising trade conflicts.
Along with a dramatic decline in U.S. equities from recent record highs, analysts mostly blamed Trump’s growing trade war for the abrupt crypto market sell-off.
Agne Linge, head of growth at decentralized on-chain bank WeFi, noted that the Crypto Fear & Greed Index had slumped to just 21, its lowest reading since September—reflecting mounting anxiety among traders.
The timing of the tariffs only added fuel to existing economic concerns. After months of cooling inflation, the sudden threat of higher import costs raised fears that consumer prices could surge again.
In response, many investors began to anticipate that the Federal Reserve might hold interest rates steady at 4.5%—or even consider raising them—to help rein in any inflationary spikes caused by trade policy shifts.
Meanwhile, James Toledano, chief operating officer of crypto wallet Unity Wallet, observed that many in the crypto industry felt deeply disappointed by Trump’s latest moves.
Experts Alarmed by the Downfall
Ruslan Lienkha, chief of markets at bitcoin and crypto platform YouHodler, pointed to technical analysis that identified the $70,000 level as bitcoin’s “next key support zone.” However, Lienkha stressed that Bitcoin would likely only test that level if negative sentiment continued to dominate the equity markets.
Although the U.S. stock had already shown many consecutive losing sessions, he advised that it was still too early to say if the more general rise had completely reversed, implying that the current deficits may just be the result of a regular market adjustment.
Markus Thielen, founder of 10x Research, echoed similar concerns, noting that bitcoin’s current price action closely followed an ascending broadening wedge pattern. This formation typically signals a potential target price in the low $70,000 range.
Bybit Hack Piling On
The broader market instability was further amplified by a $1.5 billion hack targeting Bybit, one of the largest cryptocurrency exchanges. The attack, now considered one of the biggest crypto heists in history, rattled already uneasy investors who were also contending with renewed fears over inflation and the Federal Reserve’s recent decision to pause interest rate cuts.
Jeff Mei, chief operating officer at BTSE, explained that the Bybit breach had triggered heightened volatility across the market. Macroeconomic factors including continuous inflation and uncertainties about U.S. monetary policy had also affected investor mood and helped to explain the larger market decline, he said.
Trump’s Policies: A Silver Lining?
Some crypto investors are still optimistic despite the continuous slump as they see possible legislative changes under the Trump government.
Not so long ago, the president issued an executive order establishing a national crypto reserve and encouraging innovation in cryptocurrencies inside the United States.
To provide a clearer legislative framework for digital assets, his government has also established specialized task teams including the designation of a “crypto czar.”
Geoffrey Kendrick, head of digital assets research at Standard Chartered, suggested in comments to CNBC’s Squawk Box Europe that Bitcoin could still surpass $200,000 before the year’send of the year. He attributed this potential upside to rising institutional adoption and the expected regulatory clarity that could follow from the administration’s evolving crypto policies.
Crypto Reserve to the Rescue?
On Sunday, President Donald Trump revealed plans for the U.S. government to establish a national strategic crypto reserve that includes five key cryptocurrencies. Trump reiterated his ambition to position the U.S. as the “crypto capital of the world.”
On Truth Social, Trump explained that an expert panel is moving forward with plans to create the reserve—a commitment he made to crypto industry advocates during his election campaign.
Initially, Trump listed XRP, Cardano, and Solana as part of the planned national crypto stockpile. However, about an hour later, he followed up with a separate post clarifying that Bitcoin (BTC) and Ethereum (ETH) would also play central roles within the reserve, given their dominance in market value.
Markets reacted positively to the announcement, with Cardano soaring nearly 60% — jumping from $0.64 to $1.13 before settling back to around $0.99 by Wednesday. Solana saw a bump from approximately $141 to $178, while XRP surged roughly 20%, climbing from $2.23 to $2.96, currently sitting at $2.48.
At the same time, Bitcoin reached $94,000, up from around $86,000, before settling just around $90,000.
Is an All-Time High Possible in 2025?
Legendary trader Peter Brandt recently expressed his opinion on the present situation of bitcoin and stock markets on social media, noting that the extraordinary volatility over the previous week provided enormous profit opportunities and great risks for traders.
His remarks highlight a basic fact of trade: great volatility may either be a trap or a gold mine. Strong risk management and long-term planning are even more important as some traders profited on the erratic market fluctuations while others suffered large losses.
Meanwhile, an analyst at CryptoQuant, Axel Adler explained that for Bitcoin to return to its all-time high, the market needs to see a significant bullish push. This would require breaking above the Short-Term Holder (STH) Cost Basis level, estimated around $90,000 to $91,000, and holding above that level to rebuild investor confidence.
With that in mind, traders may need to exercise patience, as Bitcoin could enter a prolonged sideways trading phase over the next two to three months — a pattern that has played out in past market cycles.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
More articles
Alisa Davidson
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
More articles
