- Bitcoin has dropped below $80,000 amid concerns over Trump’s proposed trade tariffs, triggering market uncertainty and significant liquidations, with analysts predicting a potential decline to the $70,000 range.
- Institutional investors are retreating, while retail traders remain optimistic, but historical trends suggest further losses may be ahead.
Bitcoin has once again taken a sharp downturn, falling below the $80,000 mark for the first time since November. The dip, which erased gains made since Donald Trump’s election, comes amid growing concerns over his proposed trade tariffs, sparking unease across financial markets.
Bitcoin’s Slump and Key Price Levels
According to crypto.news price tracker, Bitcoin plunged to approximately $79,800 on February 28, marking a 6% drop in just 24 hours. Traders had set $82,000 as a crucial support level, but with this barrier broken, fears of a further decline loom large. Many analysts now foresee a potential slide to the $70,000 range if selling pressure continues.
The sudden drop has led to significant liquidations in the crypto market. Data from Coinglass reveals that total Bitcoin liquidations over a 12-hour period reached a staggering $327 million, with long traders suffering the most losses. This wave of liquidations underscores the heightened volatility and fragility of the current market.
Trump’s Tariff Plans Shake Investor Confidence
One of the major drivers behind Bitcoin’s price decline is the uncertainty stemming from macroeconomic policies. Trump’s proposal to impose a 25% tariff on imports from Canada, Mexico, and the European Union has rattled investors, fueling concerns that these measures could push inflation higher.
While some analysts believe the tariffs may boost domestic manufacturing, market sentiment has shifted towards risk aversion. This has led to capital flowing out of Bitcoin and into traditional safe-haven assets such as the U.S. dollar and Treasury bonds.
Institutional Investors Pull Back
Adding to Bitcoin’s woes, institutional investors appear to be retreating from the market. U.S. spot Bitcoin ETFs saw $275 million in net outflows on February 27, bringing total outflows for the past week to $2.7 billion, as per SoSoValue data. This trend marks a reversal from the bullish enthusiasm that helped push Bitcoin to its all-time high of $109,000 in January, shortly after Trump’s inauguration.
Retail Optimism Remains—But Is It Warranted?
Despite the current downturn, many retail traders remain hopeful. According to Sentiment’s February 28 social media analysis, there has been a surge in mentions of “buy the dip,” signaling sustained optimism among retail investors. However, historical trends suggest that excessive bullish sentiment during downturns often precedes further losses.
BitMEX co-founder Arthur Hayes has also issued a cautionary note, warning that Bitcoin remains in a downtrend, forming lower lows. He predicts another sharp drop over the weekend, potentially testing the $70,000 to $75,000 range if Trump fails to push forward his budget plans.
With uncertainty looming over macroeconomic policies and institutional investors retreating, Bitcoin’s short-term outlook remains precarious. While some traders see the dip as a buying opportunity, others caution that further declines may be ahead. For now, all eyes are on the $70,000 support level and whether Bitcoin can hold its ground or sink further into bearish territory.
