Author: Marcel Pechman, CoinTelegraph; Translated by: Tao Zhu, Golden Finance

Between February 24 and February 25, the price of BTC fell from US$95,930 to US$86,010, marking November 2024 The lowest level since. The unexpected 10.7% decline triggered more than $760 million in leveraged long liquidation, raising concerns among traders about the strength of the $90,000 support level that has been maintained in the past three months.

To determine whether the bull market in Bitcoin is truly over, it is necessary to analyze the key factors behind the recent downturn. Some analysts pointed out that the net outflow of $516 million in spot Bitcoin Exchange-traded funds (ETFs) on February 24 was the main reason. However, this explanation ignores the fact that over the first four days, the total outflow reached $553 million, but Bitcoin remained above $95,500.

Investor concerns about global economic growth and Trump tariffs lead to sell-offs

Investor concerns about global economic growth appear to be the main driver of recent risk market sell-offs, especially in U.S. President Donald Trump P.P. confirmed plans to impose tariffs on imported products from Canada and Mexico starting in March (after the move has been postponed for a month).

U.S. 10-year Treasury yield (left) and DXY index (right). Source: TradingView / Cointelegraph

The yield on the 10-year U.S. Treasury bond fell to its lowest level in three months, indicating strong demand for the safest assets. Meanwhile, the dollar weakened against a basket of global currencies, reflecting this, which fell to 106.30 on February 25, the lowest point in three months.

President Trump believes that the United States is “used by foreign countries” due to unfair trade, including the imposition of VAT on North American products. The market responded negatively to the statement, with Elias Haddad, senior strategist at Brown Brothers Harriman, warning that “the U.S. economy is showing red flags.”

Bloomberg News macroeconomic analyst Mark Cardmore said, "The new U.S. has not yet achieved our expectations for growth," warning that "the U.S. may begin to cause real economic damage." ”.

The decline in confidence in the United States as the dominant economic force is often seen as a downward risk to global economic growth. Since February 21, other major assets, including Nvidia (NVDA), Tesla (TSLA), Palantir (PLTR) and Broadcom (AVGO), have seen similar price drops.

Strong correlation tableIt is clear that Bitcoin is still regarded as a risky asset, developing in parallel with the technology industry, which relies heavily on growth and usually does not provide dividends. However, specific events in the cryptocurrency market may lead to reduced exposure for Bitcoin traders.

OKX Settlement Case Strengthens the Perception that BTC is a High-Risk Investment Tool

On February 24, OKX reached a settlement with the U.S. Department of Justice, agreeing to pay a $500 million fine, mainly from earning from institutional investors cost. The exchange advises individuals to provide false information to bypass regulatory procedures to facilitate more than $5 billion in suspicious transactions and criminal proceeds, the report shows.

Although it has no direct relationship with Bitcoin, this incident casts a shadow on the regulatory environment in the United States, including strategic cryptocurrency reserves. More importantly, it is often difficult to distinguish between Bitcoin and illegal financial activities involving digital assets (mainly stablecoins). Therefore, the OKX case reinforces people's perception that Bitcoin is a high-risk investment rather than a hedge tool.

There is little reason to believe that Bitcoin’s price will fall below $86,000 as countries work to curb potential recessions and push central banks to take stimulus measures. While the initial reaction may be to reduce exposure to risky assets, investors are also worried that the currency will be diluted as the currency base expands.

So, Bitcoin’s tough currency and censorship resistance may prevail. However, it is still uncertain how many days or weeks it will take to predict Bitcoin’s breakout of $95,000.