Bitcoin Post-Election Rally Crushed: Prices Dip Below $84,000 As Tariff Tensions Rise

bitcoin-post-election-rally-crushed:-prices-dip-below-$84,000-as-tariff-tensions-rise
Bitcoin

On Wednesday, Bitcoin (BTC) prices plummeted to a four-month low, reaching as low as $81,000, as the anticipated “Trump bump” in the markets faded. This has prompted investors and traders to hedge against further decreases, with Bitcoin options indicating a notable interest in put options with a strike price of $70,000. 

Bitcoin Plummets 20% Since Trump’s Inauguration

According to data from Deribit, the largest crypto options exchange, this strike price represents the second-highest open interest among all contracts set to expire on February 28, with a total of $4.9 billion in open interest poised to expire by Friday.

Since President Donald Trump’s inauguration in January, Bitcoin has experienced a substantial decline of roughly 20% from its record highs. 

Market analysts attribute this downturn to a combination of factors, including Trump’s “aggressive geopolitical” stance and ongoing concerns about elevated inflation.

Chris Newhouse, director of research at Cumberland Labs, noted, “Tariff policies are further dampening the outlook, and stubbornly high short-term inflation expectations add to the overall caution.” 

Newhouse also highlighted that the Bybit Ethereum (ETH) hack has not only exerted downward pressure on Bitcoin’s price but has also negatively impacted overall market sentiment.

Investors Pull Back Amid Declining Demand For ETFs

The market has also witnessed a significant liquidation of bullish bets, with around $2 billion wiped out over the past three days, according to data from Coinglass. 

Bitcoin perpetual futures—a popular method for offshore investors to leverage their positions—saw a sharp decline in long positions during this timeframe.

Adding to the bearish sentiment, demand for Bitcoin exchange-traded funds (ETFs) has waned, with the group experiencing approximately $2.1 billion in outflows over the past six days. 

This reflects a broader trend of investors pulling back, with more than $1 billion withdrawn from spot Bitcoin ETFs on Tuesday alone, marking the largest outflow since these funds debuted in January of the previous year. The Fidelity Bitcoin Fund (FBTC) and BlackRock iShares Bitcoin Trust ETF (IBIT) were among the hardest hit.

Bohan Jiang, head of over-the-counter options trading at Abra, commented, “This is a mix of spot selling and basis unwind. In my view, nearly all of this is from ETF spot outflows from directional traders.”

Ethereum has also felt the impact of the Bybit incident, amplifying its volatility, while Solana (SOL) has surrendered gains achieved in recent months amid declining interest in memecoins.

The market’s search for a new catalyst to reverse its bearish sentiment has led many investors to remain on the sidelines, rotating out of cryptocurrencies in a risk-off environment. 

Ravi Doshi, co-head of markets at crypto prime broker FalconX, stated, “The crypto market is still in search of a new catalyst to reverse bearish sentiment.”

Bitcoin
The daily chart shows BTC’s price crash. Source: BTCUSDT on TradingView.com

Currently, BTC is attempting to find support at $84,578, but has fallen another 4.5% in the 24-hour time frame. 

Featured image from DALL-E, chart from TradingView.com 

Ronaldo Marquez

Ronaldo Marquez

Ronaldo is an experienced crypto enthusiast dedicated to the nascent and ever-evolving industry. With over five years of extensive research and unwavering dedication, he has cultivated a profound interest in the world of cryptocurrencies.

Ronaldo’s journey began with a spark of curiosity, which soon transformed into a deep passion for understanding the intricacies of this groundbreaking technology.

Driven by an insatiable thirst for knowledge, Ronaldo has delved into the depths of the crypto space, exploring its various facets, from blockchain fundamentals to market trends and investment strategies. His tireless exploration and commitment to staying up-to-date with the latest developments have granted him a unique perspective on the industry.

One of Ronaldo’s defining areas of expertise lies in technical analysis. He firmly believes that studying charts and deciphering price movements provides valuable insights into the market. Ronaldo recognizes that patterns exist within the chaos of crypto charts, and by utilizing technical analysis tools and indicators, he can unlock hidden opportunities and make informed investment decisions. His dedication to mastering this analytical approach has allowed him to navigate the volatile crypto market with confidence and precision.

Ronaldo’s commitment to his craft goes beyond personal gain. He is passionate about sharing his knowledge and insights with others, empowering them to make well-informed decisions in the crypto space. Ronaldo’s writing is a testament to his dedication, providing readers with meaningful analysis and up-to-date news. He strives to offer a comprehensive understanding of the crypto industry, helping readers navigate its complexities and seize opportunities.

Outside of the crypto realm, Ronaldo enjoys indulging in other passions. As an avid sports fan, he finds joy in watching exhilarating sporting events, witnessing the triumphs and challenges of athletes pushing their limits. Furthermore, His passion for languages extends beyond mere communication; he aspires to master German, French, Italian, and Portuguese, in addition to his native Spanish. Recognizing the value of linguistic proficiency, Ronaldo aims to enhance his work prospects, personal relationships, and overall growth.

However, Ronaldo’s aspirations extend far beyond language acquisition. He believes that the future of the crypto industry holds immense potential as a groundbreaking force in history. With unwavering conviction, he envisions a world where cryptocurrencies unlock financial freedom for all and become catalysts for societal development and growth. Ronaldo is determined to prepare himself for this transformative era, ensuring he is well-equipped to navigate the crypto landscape.

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With a genuine desire to become the best version of himself, Ronaldo is committed to continuous improvement. He sets personal goals, embraces challenges, and seeks opportunities for growth and self-reflection. Ultimately, combining his passion for cryptocurrencies, dedication to learning, and commitment to personal development, Ronaldo aims to go hand-in-hand with the exciting new era that the emerging crypto technology is bringing to the world and societies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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