Bitcoin has begun a correction phase, falling below $80,000 and losing about 37% of its top of $109K achieved on January 20 during Trump’s inaugural ceremony.
The asset’s recent poor performance erased 2025 gains and drove the entire cryptocurrency market into the red.
As market sentiment plummeted, the Crypto Fear and Greed Index recently hit its lowest level in two years, with a score of 10.
Trade Conflict Transforms Bitcoin Into A Red Sea
The worsening of relations between the US and some of its most significant trading partners, including China, Canada, and Mexico, was a significant contributing cause to the downturn.
The standoff resulted from President Donald Trump’s imposition of increased taxes on products coming from the three nations. Additionally, claiming that the bloc was formed to “screw” the US, the president has threatened to impose a 25 percent tax on EU goods.
Additionally, President Trump revealed that starting on March 4, he would put tariffs on Canada and Mexico and double the worldwide penalty of 10% on Chinese imports.
The pioneer cryptocurrency asset experienced a weekly loss of 16 percent after falling below the 200-day simple moving average. For the first time since November 10, prices briefly dropped below the $80,000 mark as new concerns about the demand for the US dollar grew as a result of trade tariffs.
According to Glassnode data, the latest sell-off was primarily caused by short-term Bitcoin holders who realised losses totalling $2.16 billion over the last three days. The largest losses were suffered by those who purchased Bitcoin last week.
42.85% of the losses suffered by the younger cohort were attributable to the $927 million in losses recorded by this group of holders. In a similar vein, those who kept the shares for a week to a month lost $678 million. Those who bought within a month to a year lost $257 million, while those who bought within a day lost $322 million.
Interest In The Bitcoin Spot ETF Has Decreased
Additionally, US-based spot Bitcoin ETFs are in a terrible state as a result of the enormous volume of withdrawals.
For the sixth consecutive trading day, 11 Bitcoin funds had a net outflow of $938 million, according to Coinglass.
The largest loser of the day, the Fidelity Wise Origin Bitcoin Fund (FBTC), broke a new ETF outflow record with $344.7 million in withdrawals. Following a crypto market catastrophe that sent Bitcoin into a bear market, the ETF exodus occurred.
Second place went to BlackRock’s iShares Bitcoin Trust (IBIT), which withdrew $164.04 million.
Grayscale’s two funds experienced a net loss of $151.9 million, which was divided between $66.1 million from its Greyscale Bitcoin Trust (GBTC) and $85.8 million from its Bitcoin Mini Trust ETF. The Bitwise Bitcoin ETF (BITB) lost $88.3 million.
Bybit Hack Reduces Desire To Buy
The Bitcoin market fall was made worse by Friday’s $1.49 billion theft of the cryptocurrency exchange Bybit.
Following the breach, Bitcoin fell from nearly $100,000 to $97,370. Prior to Monday, the leading cryptocurrency asset experienced a minor rebound, resettling within the $96,000 level.
Severe Fear In The Crypto Industry
The consolidation pattern that was noticed earlier this week was still followed by Bitcoin.
- But a fresh downward trend was triggered by President Donald Trump’s comments regarding trade restrictions on Canada and Mexico. The president announced that import levies on both nations would return the next week after a one-month break.
- The Bitcoin concern and Greed Index has dropped to 10, its lowest level since June 2022, indicating extreme investor concern. Today, the market sentiment index fell from 50, which was considered neutral, to 10, which indicates a high level of dread.
- Severe fear is often an indication of a buying opportunity and an indication that investors are overly concerned about market occurrences.
The flagship cryptocurrency asset may drop as low as $70,000 before stabilising, according to market indications. Arthur Hayes, a co-founder of BitMEX, has cautioned that rebounds are often preceded by intense fear.
