Bitcoin briefly fell below the $80,000 mark today, hitting its lowest point since November 10. This decline comes as the cryptocurrency dropped below its 200-day simple moving average (SMA) on Friday, marking a weekly loss of over 18%.
Why is Bitcoin ($BTC) Falling?
As of writing, $BTC is trading at $80,190 after a 5.75% drop over the past 24 hours.
It’s not just Bitcoin that’s struggling—the broader cryptocurrency market is experiencing a significant downturn. Altcoins like Ethereum are currently trading at $2,135, a 7.56% decrease in the last 24 hours. Ripple (XRP) has fallen to $2.03, down 6.7%, while Solana’s SOL slipped to $128.02. Even Dogecoin (DOGE) dropped below 20 cents, now trading at $0.1886.
Notably, the decline isn’t limited to crypto. US stocks have also fallen sharply, with the three major indexes closing in the red. The Dow Jones Industrial Average dropped 0.43%, the S&P 500 lost 1.59%, and the Nasdaq plunged 2.78%. The technology sector led the downturn, with the market value of the seven biggest tech companies plummeting by nearly $550 billion.
Amidst these declines, many traders are left wondering: ‘Why is Bitcoin falling?’
The main factor behind Bitcoin’s decline is the ongoing US tariff war with several countries. For instance, President Donald Trump announced on Thursday that he might impose tariffs on Canada and Mexico, starting March 4. Additionally, he may double the 10% tariff on imports from China.
“We expect US tariffs to regain centrality and drive the dollar sustainably higher,” ING said in a note to clients on Thursday. As a result, the dollar index surged to 107.30, up from Wednesday’s low of 106.15, further contributing to the cryptocurrency’s struggles.
What is Next for Bitcoin ($BTC)
Some remain skeptical, thinking that the recent month-long surge in crypto prices might be losing steam, while others view the pullback as just another phase in the inherent volatility of the crypto market, further influenced by global economic factors.
Arthur Hayes, the BitMEX co-founder and prominent figure in the crypto space, commented on social media that the current downturn is setting “lower lows.” Although he briefly considered increasing his risk exposure this morning, Hayes believes that the price trend points to another sharp drop, potentially pushing Bitcoin below $80,000, perhaps as early as this weekend. Afterward, he expects the market may stabilize and enter a calmer phase.
Meanwhile, Binance’s founder, Changpeng Zhao (CZ), reassured traders that Bitcoin isn’t dying, despite the recent decline.
It’s important to note that this price drop has also resulted in Bitcoin falling out of the top ten global assets, with Meta Platforms now taking its place.
Also Read: Strive CEO Suggests Introducing Bitcoin Treasury to GameStop
