Bitcoin crashes to 3-month low — Will macroeconomic uncertainty spark a BTC price rebound?

Bitcoin (BTC) price dropped from $95,930 to $86,010 between Feb. 24 and Feb. 25, marking its lowest level since November 2024. The unexpected 10.7% decline triggered over $760 million in leveraged long liquidations, raising concerns among traders about the strength of the $90,000 support level, which had held for the past three months.

To determine whether Bitcoin’s bull run is truly over, it is essential to analyze the key factors behind the recent downturn. Some analysts point to the $516 million in net outflows from spot Bitcoin exchange-traded funds (ETFs) on Feb. 24 as a primary reason. However, this explanation overlooks the fact that in the previous four days, total outflows reached $553 million, yet Bitcoin remained above $95,500.

Investor concerns over global growth and Trump tariffs drive sell-off

Investor concerns over global economic growth appear to be the main driver behind the recent sell-off in risk markets, particularly after US President Donald Trump confirmed plans to impose tariffs on imports from Canada and Mexico starting in March, following a month-long delay.

Yields on the US 10-year Treasury fell to their lowest level in three months, signaling strong investor demand for the safest assets. Meanwhile, the US dollar weakened against a basket of global currencies, as reflected in the DXY index, which dropped to 106.30 on Feb. 25—also a three-month low. 

President Trump argued that the US has “been taken advantage of” by foreign nations due to unfair trade policies, including value-added taxes on North American products. The market reacted negatively to the announcement, and Brown Brothers Harriman senior strategist Elias Haddad warned that “red flags are emerging for the US economy.”

Mark Cudmore, a macroeconomic analyst at Bloomberg News, stated that “the new US administration isn’t yet delivering on our pro-growth expectations” and warned that “US policies may be starting to cause real economic damage.”

Declining confidence in the US as the dominant economic force is often seen as a downside risk to global growth. Other major assets, including Nvidia (NVDA), Tesla (TSLA), Palantir (PLTR), and Broadcom (AVGO), have also seen similar price declines since Feb. 21.

The strong correlation suggests that Bitcoin is still viewed as a risk-on asset, moving in tandem with the technology sector, which relies heavily on growth and typically does not offer dividends. However, specific events in the cryptocurrency market may have led Bitcoin traders to reduce exposure.

OKX settlement dents Bitcoin’s image, hindering approval for strategic reserves

On Feb. 24, OKX settled with the US Department of Justice, agreeing to pay $500 million in fines, primarily from fees earned from institutional investors. Reports indicate that the exchange advised individuals to provide false information to bypass regulatory procedures, facilitating over $5 billion in suspicious transactions and criminal proceeds.

Although not directly related to Bitcoin, the event casts a negative light on the US regulatory environment, including strategic cryptocurrency reserves. More importantly, nation-states and pension funds often struggle to differentiate Bitcoin from illicit financial activities involving digital assets, primarily stablecoins. As a result, the OKX case reinforced the perception of Bitcoin as a high-risk investment rather than a hedge instrument.

There is little reason to believe Bitcoin’s price will drop below $86,000, as governments are scrambling to contain a potential economic recession, pushing central banks toward stimulus measures. While the initial reaction may be to reduce exposure to risk assets, investors also fear currency dilution as the monetary base expands.

As a result, Bitcoin’s hard monetary policy and censorship resistance are likely to prevail. However, predicting whether a recovery above $95,000 will take days or weeks remains uncertain.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.