Bitcoin continued its downward trajectory on Tuesday, positioning itself for its steepest monthly decline since a wave of notable corporate failures in the cryptocurrency sector in 2022. The value of Bitcoin plummeted by as much as 2.9%, landing at approximately $62,701 before stabilizing around $63,150 at 7 a.m. in New York. Month-to-date, Bitcoin has experienced a more than 19% drop, marking its worst performance since June 2022, a month that was heavily impacted by the collapse of the TerraUSD stablecoin and subsequent failures of key market players like Three Arrows Capital and BlockFi.
Moreover, Bitcoin is set to register its fifth consecutive monthly decrease, a streak not seen since 2018 during a tumultuous period when the initial coin offering boom unraveled. This latest decline extends a selloff that initiated in October and comes against a backdrop of growing risk aversion in global markets. This sentiment has been exacerbated following President Donald Trump’s announcement to enact a rise in global tariffs to 15%, a move that has caused anxiety among investors and exerted pressure on equities and other risk-sensitive assets.
“President Trump’s decision to raise global tariffs to 15% rattled risk assets broadly, and Bitcoin moved with them,” remarked Rachael Lucas, a crypto analyst at BTC Markets, emphasizing Bitcoin’s correlation with higher-risk investments despite its growing reputation as “digital gold.” She further noted that in times of macroeconomic fear, investors tend to pivot toward traditional safe havens, a category Bitcoin has not yet fully penetrated.
The residual effects of the crypto market crisis of 2022 are still being felt. On Monday, an administrator for Terraform Labs, which was behind the collapsed TerraUSD, initiated legal proceedings against Jane Street Group LLC. The administrator alleged that Jane Street exploited confidential information to engage in trades that expedited Terraform’s collapse. A representative from Jane Street dismissed the lawsuit as a “desperate” maneuver aimed at financial gain.
As the ongoing selloff persists, cautious sentiment remains dominant within the crypto market, leading Bitcoin to breach several significant support levels. “Bitcoin remains under pressure as investors struggle to identify meaningful near-term catalysts to drive prices higher,” stated Pratik Kala, a portfolio manager at Apollo Crypto. He highlighted the difficulties for Bitcoin miners, referencing a decision by Bitdeer Technologies to liquidate all of its Bitcoin holdings. With mining costs averaging around $80,000, many miners are operating at a loss and may continue to sell off their holdings in the near term.
In addition, U.S.-listed spot Bitcoin ETFs faced over $200 million in outflows on Monday. Options trading data from Deribit indicated that demand for downside insurance is approximately double that of bullish bets. Analysts are eyeing the next significant support level at $60,000, a threshold Bitcoin approached earlier in the month.
Tony Sycamore, an analyst at IG Australia, noted that Bitcoin is inching closer to its 200-week moving average of $58,503. The ability of the token to maintain its position above this level—as it did earlier in February—could be crucial for price stabilization. Conversely, a drop below the $58,000 to $60,000 support zone could open the door to a more significant pullback.
The broader impact on the cryptocurrency market has been stark, with the total market value of all cryptocurrencies plummeting by over $120 billion between Monday and Tuesday, according to CoinGecko. Ethereum, the second-largest digital asset, also faced declines, dropping as much as 2.9% to around $1,812 on Tuesday.
