Cryptocurrency Market Faces Significant Downturn
The cryptocurrency sector recently experienced a severe downturn, with Bitcoin (BTC) suffering a plunge of over 10% in just 24 hours, now trading below $85,000. This decline has resulted in over $985 million in liquidations, erasing gains previously driven by Donald Trump’s weekend proposal for a U.S. strategic crypto reserve. Consequently, the total market capitalization for cryptocurrencies saw a reduction of $460 billion, creating a wave of uncertainty and panic among investors.
Surge in Liquidations Amidst Crypto Market Crash
The market-wide collapse triggered a substantial increase in liquidations. Bitcoin alone accounted for $370 million in wiped-out positions within the last 24 hours. Ethereum (ETH) faced $190 million in liquidations, followed by Solana (SOL) with $58.87 million, XRP with $51 million, and Cardano (ADA) with $36 million.
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This downturn coincided with President Trump’s implementation of new tariffs on Mexico and Canada on March 4. Prior to this, Bitcoin had surged by nearly 20% from its November lows after Trump announced the strategic crypto reserve. However, the enthusiasm was short-lived as regulatory concerns and political challenges led to a rapid decline.
Bitcoin critic Peter Schiff described the announcement as the “biggest crypto rug pull of all time” and called for a Congressional investigation to determine if Trump’s inner circle might have benefited from the initial surge before the collapse.
Bitcoin’s February Decline: One of the Worst in History
February proved to be a challenging month for Bitcoin, with the cryptocurrency recording a 17.39% monthly drop, marking its second-worst February on record, only eclipsed by a 31.03% crash in 2014. Historically, February has been a strong month for Bitcoin, with an average gain of 13.12% over the past decade. The last similar February decline was in 2014, following the collapse of the Mt. Gox exchange, a significant crisis in Bitcoin’s history.
The sell-off was exacerbated by a significant outflow from Bitcoin ETFs, peaking at $1.1 billion on February 25, according to data from Farside, indicating a decline in institutional demand.
Future Prospects for Bitcoin
Currently, Bitcoin is trading at $83,724, marking a 10% drop in the past day and 22% below its January peak of $108,066. Despite this sharp decline, some industry experts remain optimistic about Bitcoin’s long-term potential. Former BitMEX CEO Arthur Hayes suggests that Bitcoin’s worst-case scenario could see a floor near $70,000, aligning with previous cycle peaks.
Similarly, CryptoQuant CEO Ki Young Ju believes that even if Bitcoin falls to $77,000, it would still constitute a healthy correction within a larger bullish phase, rather than indicating a shift to a bear market. Nevertheless, the crypto market is currently experiencing one of its most volatile phases of 2025, with regulatory clarity and macroeconomic stability emerging as crucial factors for recovery.
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