The cryptocurrency market has experienced significant downturns in recent weeks, erasing gains made post-President Donald Trump’s election. Bitcoin has fallen approximately 21% from its January 20 peak, now trading below $80,000. Ether has declined over 40% since December, and the Trump-associated meme coin has plummeted 80% from its January peak.
Analysts attribute this decline to fading optimism regarding a strategic bitcoin reserve and concerns over potential tariffs affecting speculative assets. The absence of a clear pro-crypto regulatory framework from the Trump administration has also contributed to market uncertainty. Despite the Securities and Exchange Commission withdrawing investigations into several crypto companies, including Coinbase, expectations of favourable policies may have been overly optimistic.
A recent $1.5 billion hack of the ByBit exchange has further dampened investor confidence. The global crypto market capitalisation has decreased by nearly $1 trillion since December, now at approximately $2.76 trillion.
According to Simon Peters, crypto analyst at eToro, “Bitcoin had been showing resilience until it reached the $92,000 level, which had served as support since November 2024. The break below this level likely triggered a series of liquidations, intensifying the downward pressure on the price.”
The decline comes amid broader market uncertainties, and Peters believes more downward movement could occur based on historical trends. “If we look at previous bitcoin bull markets, we often see retracements of 25-35% before finding a base and starting the next upward trend. Currently, we’re down 20% from the all-time high of $109,300. A 35% drop could push bitcoin to around $70,000, though this is not a certainty,” Simon Peters, a crypto analyst at eToro, added.
Despite the current fear, Peters encourages long-term investors to keep perspective. “While large price movements can be concerning, they are typical in any asset class. We should remember that bitcoin is still 70% higher than it was a year ago,” he stated.
For investors with liquidity and long-term confidence in bitcoin, this correction could present an opportunity to strengthen their holdings.
As of February 28, 2025, bitcoin is trading at $79,500, reflecting an 8% decrease from the previous close. Ethereum is at $2,116.78, down 10.27%. Crypto-related equities have also been affected; Coinbase Global Inc. shares have fallen 2.2%, and MicroStrategy Inc. has seen an 8.9% decline.
