Cryptos Plunge Up to 20%: Bitcoin Fights to Reclaim $90K
The cryptocurrency market is attempting to rebound from recent sharp declines, though institutional investors remain cautious in the face of high volatility.
Bitcoin (BTC) is hovering around $89,000 on Binance after dropping below $90,000 for the first time since November. Meanwhile, Ethereum (ETH) has gained approximately 4%, reaching $2,500.
Altcoins are also showing signs of recovery, with XRP leading the way with an 8% surge. Binance Coin (BNB), Cardano (ADA), Solana (SOL), and Dogecoin (DOGE) are up between 4% and 5%. According to analysts at CoinDesk, this rebound is a natural correction, as the recent downturns left digital assets in “oversold” conditions, allowing for short-term relief.
Market Uncertainty Driven by Global Trade Tensions
Despite the recovery, uncertainty persists, fueled by external pressures. The recent crypto market sell-off coincided with growing global concerns, exacerbated by U.S. President Donald Trump’s announcement that his administration will proceed with 25% tariffs on imports from Canada and Mexico, set to take effect in March.
Additionally, reports that the U.S. is considering tightening export restrictions on semiconductor chips to China have added to market instability. These developments are particularly impactful for cryptocurrencies and digital assets, given their sensitivity to trade policies and technology-related news. Historically, Trump’s tariff announcements have triggered Bitcoin price drops, while tech stocks—especially those linked to artificial intelligence (AI)—have shown a strong correlation with the crypto market.
Institutional Pressure and ETF Outflows
The pressure is particularly evident in institutional markets. Bitcoin spot exchange-traded funds (ETFs) recorded their largest single-day net outflow in history on Tuesday, with $937.8 million exiting these funds. Since early February, net outflows have surpassed $2 billion, reflecting institutional investors’ declining appetite for high-risk assets amid global economic uncertainty.
Experts believe that upcoming economic data will be crucial in easing investor concerns, especially regarding the possibility of a more hawkish Federal Reserve (Fed) than previously anticipated. While the Fed had initially signaled fewer interest rate cuts, markets now expect at least two additional cuts this year, fueling speculation. In this context, Friday’s release of the Personal Consumption Expenditures (PCE) price index will be a key indicator for the Fed’s monetary policy outlook and the future direction of financial markets.
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