Bitcoin is on a rollercoaster, bringing the whole crypto market down: What’s the deal?
The cryptocurrency market took a big hit on Tuesday, February 25, dropping below $90,000. This sudden plunge of 7.2% in the last week has left investors feeling uneasy due to the extreme volatility in the crypto world.
Bitcoin Hits Three-Month Lows
Bitcoin saw a 7% drop in the last 24 hours, now sitting at $88,840. Just last week, it had reached $99,000, marking its lowest level in three months.
Ethereum and Altcoins Also Decline
The fall of Bitcoin has had a direct impact on altcoins, leading to even steeper declines:
– Ethereum (ETH) fell 9.3% to $2,420.
– BNB (Binance Coin) dropped 4.3% to $612.
– Solana (SOL) experienced the biggest plunge, dropping 11.8% in 24 hours and 17.85% in the last week, now at $139.
With the selling pressure increasing throughout the crypto market, investors are seeking refuge in safer assets amidst the current uncertainty.
Why is Bitcoin Falling?
Several factors are contributing to the sharp correction in the market:
– Bybit Hack: The $1.5 billion loss on a major exchange has rattled investor confidence and impacted prices.
– Political Uncertainty in the U.S.: President Trump’s lack of clear direction on establishing a strategic Bitcoin reserve for the U.S. is raising doubts about BTC’s institutional future.
– Potential Fed Rate Adjustments: Higher than expected inflation data in the U.S. may lead the Federal Reserve to raise interest rates, prompting investors to shift capital to safer and more profitable options in the traditional financial system.
What Could Happen Next?
Despite the drop, there are positive signs that could help stabilize the decline. Companies like Strategy (formerly MicroStrategy) are continuing to buy, adding $2 billion worth of BTC to their reserves, indicating ongoing support from major players.
However, high volatility and uncertainty still loom over the market. The Fed’s response in the upcoming weeks, along with the recovery of exchanges following the Bybit attack, will play a crucial role in determining the future direction of Bitcoin and the broader crypto ecosystem.
