Bitcoin Has Dropped Below US $90K: Here’s Why – BitRss

If you haven’t followed the markets over the past 24 hours…it might be a good idea to keep your head in the sand.

Cryptocurrency has been decimated this week, with hundreds of billions seeping from the market in a matter of days. The crypto market capitalization has dropped to US $2.92 trillion (AU ($9.91) $4.6 trillion) and the Fear and Greed reading has fallen to its lowest point since August 2024.

Bitcoin, typically a talisman of strength during the hard times, has copped it as bad as anything, with its value falling below US $90k (AU $141k).

So what’s behind the crash, and is it time to start preparing our bunkers for an inevitable doomsday? 

Related: ByBit Breach: $1.5 Billion in Funds Stolen as Exchange Vows to Return Customer Assets

Macroeconomic Outlook Gloomy Pushes Bitcoin, Global Markets Down

Despite macroeconomic pressures squeezing from all angles, Bitcoin hasn’t set foot below US $90k (AU $141k) since Donald Trump was elected.

But it seems the challenges were finally too much for the crypto market, with the last 48 hours the perfect storm of bearish sentiment and global economic struggles.

There are several reasons for Bitcoin’s 7% weekly slip, but the main driving force is simply fears circling the US economy.

Trump’s election sent the crypto market skyrocketing, but the flow-on effect from his tariffs may have caused as much bearish sentiment as his victory caused positive sentiment.

A recent Consumer Confidence report released in the United States showed that pessimism among businesses and individuals was starting to build rapidly in February, largely due to tariffs and inflation pressures.

The despondent results of the survey can be summed up in one sentence:

In February, consumer confidence registered the largest monthly decline since August 2021.

Stephani Guichard, Senior Economist at The Conference Board

Most seem to believe that inflation, having already hung around for longer than ideal, may ramp up again on the back of Trump’s tariffs against some of the United States’ major trade partners.

When sentiment goes bad, risk-on assets are often the first to leave people’s portfolios – something that crypto has unfortunately bore the brunt of this time around.

However, equities took a tumble too, with NDQ 100 (-4.7%) and the S&P 500 (-2.6%) feeling the pinch over the past five days of trading.

Big News Event May Be Necessary to Reignite Bull Market

Macroeconomic struggles are the primary concern for traders right now – but there are other issues at play, too.

The fallout from high-profile politicians releasing… less-than-ethical memecoins has re-invigorated the discourse around crypto’s role in facilitating scammers. 

And to make matters worse, the industry suffered its worst-ever exchange hack earlier this week, with ByBit falling victim to US $1.5b (AU $2.4b) worth of losses.

These events rattled an already-shook market, leading to the billions of dollars in outflows we’ve seen in the last 48 hours.

With macroeconomic sentiment so downtrodden, many now believe it’s going to take a significant news event to pull crypto out of the mud. Something like a new ETF approval or a Federal Strategic Bitcoin Reserve going live in the US.

Until then, it might be a case of waiting out inflation and hoping the Feds begin to introduce quantitative easing measures in H2 2025.

And if you’re a long-term believer in Bitcoin, well, Eric Trump has some advice for you.

The post Bitcoin Has Dropped Below US $90K: Here’s Why appeared first on Crypto News Australia.