Bitcoin entered a corrective phase, dropping below $80,000 and losing nearly 37% from its peak of $109,000, which occurred during Trump’s inauguration on January 20. This downturn in Bitcoin’s performance led to a widespread decline in the cryptocurrency market, erasing the gains made in 2025.
The Crypto Fear and Greed Index recently plunged to a score of 10, indicating “Extreme Fear,” its lowest level in two years, reflecting a sharp drop in market sentiment. A key driver of this market slump was the escalating trade tensions between the U.S. and several major trading partners, including China, Canada, and Mexico.
President Donald Trump’s announcement of new tariffs on goods from these countries triggered the market uncertainty. Additionally, Trump threatened to impose a 25% tariff on EU imports, accusing the bloc of being designed to “screw” the U.S. He also revealed plans to double the 10% tariff on Chinese imports and impose new tariffs on Canada and Mexico starting March 4.
Bitcoin’s price dipped below its 200-day simple moving average, resulting in a 16% weekly loss. It briefly fell below $80,000, marking the first time since November 10 that it had dropped below that threshold, as concerns about U.S. demand for the dollar increased due to the trade tariffs.
According to Glassnode data, Bitcoin’s short-term holders realized $2.16 billion in losses over the last three days, driving much of the recent sell-off. Investors who purchased Bitcoin in the past week incurred the largest losses, totaling $927 million, which accounted for 42.85% of the losses among newer holders.
Additionally, holders who had bought Bitcoin within the past week to a month lost $678 million, while those who bought between a month and a year ago lost $257 million. Investors who purchased within a day saw $322 million in losses.
