Bitcoin’s recent slump intensified on Friday as investors retreated from risky assets amid heightened economic uncertainty and turmoil within the cryptocurrency sector. The flagship digital asset dropped by as much as 7.2% to $78,226 before recovering slightly, marking a stark reversal from the optimism that had propelled it to record highs just weeks ago.
The ongoing selloff extends Bitcoin’s losses to 28% since it reached an all-time high of $109,241 on January 20, coinciding with US President Donald Trump’s inauguration. February alone saw Bitcoin tumble by 18%, making it the most significant monthly decline since June 2022.
Bitcoin Falls Below Key Technical Indicators
Bitcoin has now dipped below its 200-day moving average, a key measure of long-term price trends, for the first time since October. Additionally, its 14-day relative strength index (RSI) last week fell into territory signaling that the asset is considered oversold, a situation last seen in September. These technical signals have added to concerns among traders and analysts, raising questions about Bitcoin’s near-term trajectory.
Investor Exodus from Bitcoin Funds
Investor sentiment has also soured in the broader crypto market, with a record $3.3 billion withdrawn from US spot Bitcoin exchange-traded funds (ETFs) in February alone. The sharp outflows mark the largest monthly exodus since these funds were introduced, underscoring investors’ shift toward safer assets amid ongoing market volatility.
Trump’s Influence on Crypto Markets
Despite the recent downturn, optimism had initially surged in the wake of Trump’s election victory, as the administration made moves that were seen as favorable to the cryptocurrency industry. Trump has repeatedly expressed his commitment to making the US a dominant player in the digital asset space, stating, “I want the US to be the crypto capital of the planet and the Bitcoin superpower of the world.”
The recent downturn, however, has cast a shadow over such ambitions, as traders grapple with market uncertainty and regulatory concerns. While the broader financial markets remain on edge, all eyes are now on whether Bitcoin can stabilize or if further declines lie ahead.
