Bitcoin had a tough February, dropping over 16%—its worst monthly performance since June 2022. The leading cryptocurrency, which hit an all-time high of $109,115 on January 19, has now lost over 25% of its value, trading around $82,000 at the time of writing. With investors bracing for further macroeconomic uncertainty, Bitcoin’s price action suggests that the market is at a crucial turning point.
Tariff concerns and bitcoin’s unexpected political connection
Bitcoin’s sharp decline in February was linked to geopolitical concerns, particularly renewed fears over trade tariffs. President Donald Trump announced that the U.S. will impose a 25% tariff on Canadian and Mexican goods and an additional 10% tariff on imports from China which eventually started March 4. The news sent shockwaves through global markets. Bitcoin was not spared.
Nic Puckrin, founder of Coin Bureau, noted that bitcoin and altcoins are now “entirely driven by politics,” a stark contrast to the original vision of bitcoin as an apolitical, decentralized asset.
While Trump’s pro-crypto stance initially fueled optimism—leading bitcoin to rally 44% from Election Day to its January peak—the so-called “Trump trade” is now losing steam.
Adding to the uncertainty, the $1.5 billion Bybit crypto exchange hack further rattled investor confidence, reinforcing a risk-off sentiment in the market.
Is this a technical correction?
Bitcoin’s recent drop is not entirely unexpected.
Analysts at B2BINPAY pointed out that the cryptocurrency was overdue for a correction after its rapid ascent. The market structure is showing signs of a pullback, with bitcoin recently touching $78,400—its lowest price in three months.
Standard Chartered predicts that bitcoin could retest $69,000 in early March.
However, blockchain analytics firm IntoTheBlock noted that a significant number of bitcoin holders accumulated coins between $60,000 and $72,000, suggesting that this range could act as a strong support zone against further declines.
Bitcoin’s market dominance reaches a four-year high
Despite its price drop, bitcoin’s dominance in the crypto market has surged to over 60%, its highest level since early 2021. Investors seem to be moving capital away from speculative altcoins and into bitcoin as a perceived “safe haven” in the crypto space.
Jameson Lopp, CTO of Casa, believes that many investors have grown disillusioned with altcoins, especially after years of failed projects and market scandals. Unlike the 2021 “altseason,” where a wide range of tokens surged in value, today’s market appears to favor only a select few altcoins.
“Selective altseason is here,” noted Ki Young Ju, CEO of CryptoQuant. He pointed out that infrastructure-related tokens and those tied to institutional adoption, such as stablecoins, have remained resilient.
Lessons from bitcoin’s past corrections
A look at bitcoin’s historical bull runs suggest that corrections like this are not unusual. In 2021, bitcoin experienced seven major pullbacks ranging from -17% to -51%, yet the overall bull run continued. Each time, the market recovered as long-term investors stepped in to buy the dip.
Technical indicators like the 3-month Simple Moving Average (SMA) suggest that bitcoin’s key support level lies around $71,880. If this level fails to hold, a deeper correction could be in play.
What’s next for bitcoin?
For now, bitcoin is at a crossroads.
Presently, bitcoin is trading at about $82,000 and trending downward. Whether the current downturn extends into a deeper bear phase or serves as a setup for another leg up depends on how investors react in the coming weeks.
As always, caution and a strategic approach remain key in navigating bitcoin’s volatile market.
Read more: Crypto market plunges as Bybit suffers $1.4 billion hack.
Victor Solomon is a crypto analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto.
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