Bitcoin (BTC), the world’s leading cryptocurrency, has taken a significant hit, dropping below $91,000 as of February 25, 2025. From macroeconomic uncertainties to market-specific dynamics, several factors are contributing to why Bitcoin is falling and why its price is down today.
In this article, we’ll break down the latest insights and explore the reasons behind Bitcoin’s current struggles. Especially since the price has reached its lowest level in three months, and some experts suggest that it may soon drop to around $70,000.
Why Is Bitcoin Price Falling?
As of today, Bitcoin (BTC) has fallen over 4.5% in the past 24 hours, reaching its lowest level since late November at under $91,000, according to CoinMarketCap data. This drop mirrors a broader crypto market decline, with the total market capitalization shedding 8%, sliding from over $3.31 trillion to approximately $3.09 trillion.
It's worth noting that Monday's nearly 5% decline was the steepest since January 25, when BTC dropped 5.2%, losing over $5,000 in a single day.
Other cryptocurrencies also saw significant losses. Ethereum (ETH) dropped 8.5% to below $2,500, while XRP lost 9% of its value, trading at $2.25. In my previous post, I also reported the stronger slum of Dogecoin's (DOGE) price to November 2024 lows. The cascading effect has triggered nearly $1 billion in liquidations, with long Bitcoin bets accounting for over $57 million of that total, per CoinGlass.
Bitcoin Price Technical Analysis
Based on my technical analysis, Bitcoin is currently testing the lower boundary of a three-month consolidation range, which lies between $92,000 and $90,000. The last interaction with this level in early February did not lead to a significant upward correction, and the upper boundary of the range was last tested in mid-January.
However, there is a strong accumulation of buy orders at the current level, which, in my view, could make it difficult for buyers to push through. If this level is breached, my next target would be the 200 EMA, located just below $86,000.
Why is Bitcoin falling now? Let’s dive into the key reasons behind this downward spiral.
5 Reasons Bitcoin Is Crashing
Trump’s Tariffs Spark Crypto Market Uncertainty
One of the most immediate catalysts for Bitcoin’s price drop today is the announcement from U.S. President Donald Trump regarding new tariffs. On February 24, 2025, Trump confirmed during a news conference with French President Emmanuel Macron that his administration’s planned 25% tariffs on imports from Canada and Mexico are moving forward as scheduled. Additionally, a 10% tariff on Chinese goods has added fuel to the fire.
Correlation with Traditional Markets Intensifies
Bitcoin’s price movement is increasingly mirroring traditional financial markets, a trend highlighted by Bitfinex in their February 24 Alpha report. The S&P 500 has dropped 2.3% over the past five trading days, while the Nasdaq Composite has fallen 4% in the same period. This suppression in broader equity markets is dragging down risk assets, including cryptocurrencies.
"Technology sentiment deteriorated further following reports that the Trump administration is seeking to tighten Biden-era controls on chip technology exports to China, particularly targeting Nvidia chips and maintenance of semiconductor equipment. This comes after Trump ordered increased scrutiny of Chinese investments in key U.S. sectors, further straining U.S.-China relations," commnented XTB.
Institutional Demand Wanes
Another critical factor in Bitcoin’s fall is the significant slowdown in institutional demand via spot exchange-traded funds (ETFs). Bitfinex reported outflows totaling $552.5 million from Bitcoin ETFs for the week ending February 21, marking a consistent trend of withdrawals. This pullback suggests that large investors are either taking profits or reallocating capital amid the uncertain market environment.
"Bitcoin has broken the critical $95,000 level, a move that could have significant implications in the coming weeks. With several key factors at play, this is not the time for complacency—market dynamics are shifting, and traders should remain vigilant," commented Markus Thielen, the CEO of 10x Research.
#Bitcoin & @MicroStrategy: The New Favorite Assets for Hedge Funds@BlackRock IBIT, MicroStrategy - what we know ...????1-21) Although Bitcoin ETFs have attracted $38.6 billion in net inflows since their January 2024 launch, our analysis suggests that only $17.5 billion (44%)… pic.twitter.com/7Bf95P9NpX
— 10x Research (@10x_Research) February 23, 2025
Arthur Hayes Predicts “Goblin Town” for Bitcoin
Crypto influencer and former BitMEX CEO Arthur Hayes added fuel to the bearish sentiment with a post on X on February 25, 2025. Hayes warned of an impending “goblin town” for Bitcoin, a term signaling a severe price crash. He pointed to hedge funds holding positions in BlackRock’s iShares Bitcoin Trust (IBIT) as a potential trigger.
According to Hayes, these funds have gone long on IBIT while shorting CME Bitcoin futures to earn a yield higher than short-term U.S. Treasuries. However, as Bitcoin’s price falls and the basis (the difference between spot and futures prices) narrows, these funds may unwind their positions by selling IBIT and buying back futures. Hayes predicts this could push Bitcoin down to $70,000, a level he sees as increasingly likely during U.S. trading hours.
#Bitcoin goblin town incoming:Lots of $IBIT holders are hedge funds that went long ETF short CME future to earn a yield greater than where they fund, short term US treasuries.If that basis drops as $BTC falls, then these funds will sell $IBIT and buy back CME futures. These… pic.twitter.com/3PskTxrBPR
— Arthur Hayes (@CryptoHayes) February 24, 2025
Market Consolidation and Lack of Momentum
Bitfinex analysts have described Bitcoin as being at a “critical juncture” after nearly 90 days of range-bound trading between $91,000 and $102,000. This prolonged consolidation reflects a lack of momentum needed for a sustained breakout.
The report states, “The momentum required for a sustained breakout has been lacking, and this has led to a period of contraction and consolidation across almost all major crypto assets.”
This stagnation, combined with external pressures like tariffs and declining consumer sentiment, has left Bitcoin vulnerable to sharp declines, as seen today.
Why Is Bitcoin Price Down Today? A Perfect Storm
Today’s Bitcoin price drop is the result of a perfect storm of macroeconomic and crypto-specific factors:
- Trump’s Tariff Policy: Inflation fears are pushing investors away from risk assets.
- Traditional Market Slump: Bitcoin’s correlation with equities amplifies its losses.
- Fading Institutional Support: ETF outflows signal waning confidence from big players.
- Bearish Sentiment: Predictions like Hayes’ “goblin town” add psychological pressure.
- Consolidation Fatigue: A lack of breakout momentum leaves BTC exposed to sell-offs.
FAQ
What’s Next for Bitcoin Price?
With Bitcoin trading at $91,572 as of this writing, investors are left wondering whether this dip is a buying opportunity or the start of a deeper correction. The cryptocurrency’s fate may hinge on how markets digest Trump’s tariffs and whether institutional demand rebounds. For now, the $90,000 level is a critical support to watch—if it breaks, Hayes’ $70,000 target could come into play.
Why Is Bitcoin Currently Down?
Bitcoin is currently down due to a combination of macroeconomic pressures and crypto-specific dynamics. As of February 25, 2025, Bitcoin has fallen below $91,000, driven by U.S. President Donald Trump’s announcement of 25% tariffs on Canada and Mexico, alongside a 10% tariff on Chinese goods. These policies are stoking inflation fears, prompting investors to pull back from risk assets like Bitcoin.
Will Bitcoin Rise Again?
Analysts at Bitfinex note that Bitcoin is at a “critical juncture,” and a breakout could occur if momentum returns. Factors that could drive a recovery include a reversal in institutional buying (e.g., renewed ETF inflows), clarity on U.S. economic policies reducing inflation fears, or a broader risk-on sentiment in global markets. However, in the short term, the $90,000 support level is key—if it holds, a rebound could follow; if it breaks, further declines may precede any recovery.
Why Is Crypto Falling Now?
The broader crypto market is falling now alongside Bitcoin due to shared vulnerabilities and external pressures. On February 25, 2025, the total crypto market cap dropped 8%, from over $3.31 trillion to $3.09 trillion, spurred by nearly $1 billion in liquidations, with $891.52 million from long positions. Trump’s tariff announcements are a major driver, as they threaten inflation and reduce appetite for speculative assets like cryptocurrencies.
This article was written by Damian Chmiel at www.financemagnates.com.
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