The price of Bitcoin has entered a decline, marking its fourth consecutive day of downturn as of February 3, 2025, with reductions totaling nearly 14% since the previous Friday. This market slump coincided with recent reports about trade tariffs introduced by the current U.S. administration.
The announcement of new tariffs—specifically a 25% tax on goods from Canada and Mexico—was made on Sunday, with these measures set to take effect soon. Similarly, plans were revealed to impose additional trade fees on the European Union. In reaction, key indexes such as the Dow Jones Industrial Average, S&P 500, and Nasdaq saw notable drops, while the value of the U.S. dollar strengthened.
These sudden changes in the economic landscape have led to a significant drop in Bitcoin prices, which was almost unavoidable given the market pressure and investor panic. Analysts emphasized that such geopolitical developments can create major volatility across markets, recalling past instances where cryptocurrency values plummeted following similar announcements.
On the market, Bitcoin is currently trading at approximately $95,700, reflecting a 2.3% decrease from the previous day’s close — although it did experience a sharper decline of nearly 7% overnight. Over the past four days, the cryptocurrency has tested the $91,281 mark, a level not seen since mid-January.
Given the market dynamics, experts believe that the current decline had been predictable. The widespread expectation of stability was shattered, indicating that investors now need to act promptly to address potential losses and reassess their strategies.
Despite the current situation, Bitcoin appears to have strong technical support at approximately $92,000, a threshold that has held firm for over two months and has been tested multiple times. If this level remains intact, it could signal that buyers are gearing up to step in and stabilize the price near this support zone.
Conversely, if the price dips below the critical support mark, attention will turn to the $83,000 area, which aligns with significant technical indicators suggesting that a sustained downtrend could be emerging.
The panic in the cryptocurrency market has not been limited to Bitcoin. Other altcoins have experienced even more pronounced declines. Ethereum fell more than 20%, while XRP contracted over 30%, reaching lows not seen in months. Dogecoin also suffered a drop of 25%. These movements illustrate a broader trend of fear among investors, indicated by a drop in the fear and greed index to 39 points.
The market downturn has resulted in substantial liquidations within leveraged positions, amounting to about $2.26 billion over a 24-hour period. Noteworthy is that the largest share of these liquidations occurred in Ethereum, further showing the extent of the sell-off.
As for future projections, the market is characterized by a strong sense of uncertainty arising from new tariff policies. Analysts speculate that while support levels may be holding for now, investors should be wary of continued volatility as market participants react to evolving geopolitical conditions.
The anticipated Bitcoin halving event in 2024 could contribute to bullish sentiments in the long run, as could increasing institutional interest in cryptocurrencies. However, short-term fluctuations should be expected as the market adjusts to current economic realities.
In summary, the recent price drop in Bitcoin, precipitated by geopolitical factors and economic announcements, has led to heightened volatility and significant stress in the cryptocurrency market. Investors are encouraged to observe key support levels while navigating a landscape characterized by uncertainty and rapid changes in sentiment.