Bitcoin (BTC) fell below $87,000 in after-hours trading, but then rebounded slightly. The current trading price is $88,297, which is 7.67% lower than the closing price of the previous trading day. According to Coinmarketcap, in the past 24 hours, BTC's trading range was between $86,987 and $96,028, marking the lowest valuation since November 2024.
Bitcoin Plummets Below $89,000 Amid Regulatory Setbacks and Market Turmoil
February 25, 2025
Cryptocurrency markets experienced a dramatic sell-off on Tuesday, with Bitcoin (BTC) crashing below the 2,300, while "Trump-themed" meme coins and Dogecoin (DOGE) saw losses exceeding 14%.
Key Drivers of the Crash
- **Regulatory Rejections in the U.S.**
- A proposed bill in South Dakota (HB 1202), which aimed to allow state-level Bitcoin investments of up to 10% in public funds, was effectively killed after legislators voted to delay the decision beyond the 40-day legislative session.
- Similarly, Montana rejected a bill to classify Bitcoin as a state reserve asset, citing concerns over volatility and speculative risks. These setbacks fueled doubts about Bitcoin’s institutional adoption and triggered panic selling.
- Leverage Liquidation and Market Sentiment
- Over 315,600 traders were liquidated in 24 hours, with total crypto losses exceeding 950 million of the losses, reflecting widespread over-leveraged bets.
- The Federal Reserve’s hawkish stance and a strengthening U.S. dollar added pressure on risk assets, diverting capital away from cryptocurrencies.
- Security Breach and Macro Pressures
- A historic $1.46 billion hack targeting Bybit’s offline Ethereum wallet further rattled confidence in crypto security, with stolen funds being funneled to new addresses and sold.
- Critical Fix: A $16 billion unlock of Solana (SOL) tokens from the bankrupt FTX exchange loomed, exacerbating fears of further selling pressure.
Market Reactions and Institutional Moves
- U.S. Crypto Stocks: Shares of Bitcoin-linked firms like Coinbase and CleanSpark fell 5–6% in after-hours trading.
- Contrasting Sentiment: Citadel Securities signaled plans to expand as a crypto liquidity provider, banking on potential regulatory support under former President Trump’s influence.
Outlook and Analyst Warnings
Matrixport warned of further downside risks, citing weak technical indicators and cautious investor sentiment. However, some remain bullish long-term, pointing to corporate Bitcoin accumulation strategies and potential ETF-driven demand later in 2025.
Investors are advised to brace for continued volatility amid unresolved regulatory uncertainties and cyclical market corrections.
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