empty
27.02.2025 11:45 AM
Bitcoin pulls back

This image is no longer relevant

The leading cryptocurrency has once again disappointed market participants with a sharp decline. Many analysts link this to geopolitical tensions and prevailing bearish sentiment in the crypto market. However, Bitcoin aims for a comeback, though the timeline remains uncertain.

Bitcoin's price fell sharply on Wednesday, February 26, dropping below $85,000 and approaching $82,000. The political momentum that had fueled its recent rise began to fade. The leading digital asset has now lost nearly 25% from its all-time high of $108,000. On Thursday, February 27, BTC was trading near $86,460, marking its lowest level of the year.

In recent months, Bitcoin hit record highs amid shifts in the US political landscape following Donald Trump's re-election. The Republican Party gained control of both the House of Representatives and the Senate and made Bitcoin a key part of its platform. This sparked optimism in the crypto and blockchain communities. However, regulatory clarity did not improve, dampening enthusiasm.

This image is no longer relevant

Tim Enneking, managing partner at Psalion, noted that the post-election Bitcoin surge was followed by only statements of intent at federal and state levels, as well as in other countries. According to him, the US government is now in disarray due to Trump's tariff policies, Elon Musk's influence on DOGE, and Republican efforts in Congress to address the budget deficit.

Amid this uncertainty, investors are offloading risky assets like cryptocurrencies. Stock market indices, including the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite, have also declined since the start of the month.

Experts note that Bitcoin remains on a downward trajectory. It recently fell below $89,000, losing 8.5% in just a week. This prolonged decline has raised investor concerns about whether BTC has hit bottom. Some analysts believe the current market sell-off could signal a turning point for Bitcoin.

Bitcoin capitulation: Has the market bottomed out?

Crypto analyst Caueconomy recently called this the "biggest Bitcoin capitulation of 2025." He compared it to a similar event in August 2024, suggesting that Bitcoin might have reached a local bottom. He noted that over 79,000 BTC were sold at a loss in a single day, totaling $1.7 billion. This sell-off mirrors the one triggered by Japan's interest rate hike last year, which led to a widespread reduction in leveraged positions.

According to Caueconomy, Bitcoin's previous capitulation in August 2024 marked a short-term bottom. Afterward, the market stabilized, and Bitcoin rallied to $100,000 by December 2024. While history may be repeating itself, the cryptocurrency's future trajectory remains uncertain.

Additional bearish factors

Many analysts cite multiple factors behind Bitcoin's decline. Mike Marshall, senior researcher at Amberdata, believes the drop to $85,000 reflects growing investor anxiety. The exit of major funds from Bitcoin ETFs and a broader sell-off in tech stocks have added to the pressure.

Marshall has noted that Bitcoin tends to follow the movement of tech stocks, adding that when markets like Nasdaq decline and companies such as Tesla and Nvidia face difficulties, BTC also comes under pressure.

This image is no longer relevant

Trump's new tariffs have worsened Bitcoin's outlook. Other bearish factors include geopolitical instability, weakening consumer confidence, declining business activity, and inflation concerns. Brett Sifling, an asset manager at Gerber Kawasaki Wealth & Investment Management, pointed out that Bitcoin remains closely correlated with the stock market.

Sifling pointed out that, amid a broader shift away from riskier assets in the stock market, Bitcoin had mirrored Nasdaq's recent 5% decline. He also highlighted a significant outflow from spot Bitcoin ETFs, with nearly $1 billion withdrawn in a single day this week.

On Tuesday, February 25, spot Bitcoin ETFs in the US saw record daily outflows since their launch over a year ago. According to SoSoValue, net outflows nearly doubled, reaching $1.01 billion. This marked the sixth consecutive session of withdrawals. Since Bitcoin ETFs were approved in January 2024, total inflows have now fallen to $38 billion.

Analysts at QCP Capital believe institutional demand for BTC has peaked. The market faces continued uncertainty for several weeks following Trump's decision to impose tariffs on Canadian and Mexican goods and restrict Chinese investments in the US economy. As a result, many investors are exiting the crypto market to reduce risks.

Binance analysts argue that the current crypto market downturn, driven by economic and political tensions, is temporary. They view Bitcoin's decline as a tactical pullback rather than a trend reversal. They believe that the leading cryptocurrency could recover quickly and reaffirm its dominance in the global digital asset market.

Larisa Kolesnikova,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Diverging markets: US stocks stall, Asia accelerates

Dow: -0.22%; S&P 500: flat; Nasdaq: +0.32%. The US services sector contracted in May for the first time in nearly a year. CrowdStrike slumped on a downbeat revenue forecast

12:40 2025-06-05 UTC+2

US Market News Digest for June 5

Major US stock indices ended the trading session with minimal changes: the S&P 500 edged up 0.01%, the Nasdaq gained 0.32%, while the Dow Jones slipped 0.22%. Market participants adopted

Ekaterina Kiseleva 11:59 2025-06-05 UTC+2

US indices stall, Asia accelerates: what's happening in global markets

Dow -0.22%, S&P 500 flat, Nasdaq +0.32% Services sector shrinks in May for first time in almost a year CrowdStrike falls on pessimistic quarterly earnings forecast Fed lifts Wells Fargo

Thomas Frank 10:19 2025-06-05 UTC+2

Bitcoin's seesaw: to go on with uptrend or enter consolidation?

The first cryptocurrency, Bitcoin, is facing significant pressure, swinging between pullbacks from previous peaks and rallies toward new ones. Nevertheless, the flagship asset refuses to give in and continues

Larisa Kolesnikova 14:51 2025-06-04 UTC+2

US Market News Digest for June 4

Amid ongoing trade disputes and mounting fiscal concerns, US investors continue to adhere to a "buy-the-dip" strategy. Having reached new highs, the S&P 500 remains in the spotlight as market

Ekaterina Kiseleva 12:42 2025-06-04 UTC+2

Optimism in Markets: Dollar General, Pinterest, Wells Fargo Stocks Rise to Lift Indexes

Dow Up 0.51%, S&P 500 Up 0.54%, Nasdaq Up 0.81% Dollar General Advances on Year-Over Sales Target Pinterest Advances After JPMorgan Stocks Rise Wells Fargo Stocks Trade Higher After Asset

Thomas Frank 10:34 2025-06-04 UTC+2

Growth through worries: Markets rally, but manufacturing and Tesla stall

Indices: Dow flat, S&P 500 up 0.4%, Nasdaq up 0.7% Investors hope for trade talks despite Trump steel threat Tesla falls after reporting weaker May sales in some EU countries

Thomas Frank 11:41 2025-06-03 UTC+2

US Market News Digest for June 3

After gains in the previous session, US equity benchmarks, including the S&P 500 and Nasdaq, came under pressure as futures slipped amid lingering uncertainty over trade negotiations between Washington

Ekaterina Kiseleva 11:27 2025-06-03 UTC+2

Trump shakes Wall Street Again: market indices respond instantly

Trump's remarks on China stir volatile market moves. Ulta Beauty gains after raising its full-year profit forecast. The Dow edged up by 0.1%, the S&P 500 dipped 0.01%

12:44 2025-06-02 UTC+2

US Market News Digest for June 2

May turned out to be the most successful month for the US stock market since November 2023. Although the month was marked by considerable volatility, sparked in part by Donald

Ekaterina Kiseleva 12:14 2025-06-02 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.