Did major crypto assets pull back as broad macro challenges dampened optimism for growth in high-risk markets? A sudden price drop sent Bitcoin to its lowest level since November, dragging the broad market with it.
The BTCUSD rate fell below $89,000 on Tuesday, just a month after reaching an all-time high above $108,000. The peak coincided with Donald Trump’s inauguration, amid speculation that he could become the first-ever “Bitcoin president.”
Ethereum, the second-largest cryptocurrency, plunged 18% dropping under $2,400 per token as anxious traders rushed to offload their risk assets.
The overall crypto space declined by 9% to $2.88 trillion. The rapid sell-off caught traders and investors off guard, leading to widespread liquidations totaling $1.4 billion in 24 hours. Bitcoin absorbed the biggest blow with more than $500 million in liquidations — half of which occurred within the first hours of Tuesday trading.
Bitcoin’s dip below $89,000 broke key support, while Ether’s steep decline added fuel to the fire. But what triggered the sell-off? Frankly speaking, there was no particular reason — just mounting fatigue from the lack of significant market-moving news. No headlines, just declines.
It hasn’t been an easy year for crypto investors. Despite hopes for crypto-friendly legislation that could spur industry growth, Bitcoin is down nearly 5% since the start of January. Some of the latest market weakness has been attributed to President Trump, who has yet to deliver on key pro-crypto promises nearly a month into his term.
While the new Trump administration voiced support for the crypto industry, tangible action remains elusive. Measures like the proposed Bitcoin Strategic Reserve have yet to materialize, leaving investors waiting for concrete developments.
The broader crypto market was also impacted by last week’s Bybit hack, described as the “biggest digital heist ever”. Hackers exploited a vulnerability when the exchange moved funds from its offline "cold wallet," designed for secure storage, to a "warm wallet" used for active trading. In total, approximately $1.5 billion was stolen and redirected to an unknown address.
In less than 72 hours, Bybit replenished its reserves through a mix of emergency loans and large deposits. While this restored the exchange’s balance and kept customer withdrawals open, it did not recover the stolen funds.
Efforts to retrieve the stolen assets remain ongoing. Bybit has offered a 10% bounty for their return, but history suggests the odds of recovery are slim.
This article was written in cooperation with TradingView