Bitcoin Plunges 25% From All-Time High – What’s Next for Crypto Traders?

Bitcoin’s price has tumbled 25% from its all-time high, sending shockwaves through the cryptocurrency market. The selloff, which has deepened amid concerns over US President Donald Trump’s new tariff threats, signals a broader shift in investor sentiment.

But for traders, this downturn isn’t just a cause for concern—it’s also an opportunity.

Bitcoin’s Drop: A Market Reality Check

On January 20, the day of Trump’s inauguration, Bitcoin surged to a record $109,241. However, the digital asset has since plummeted, experiencing a 7.1% drop on Friday alone. The broader cryptocurrency market followed suit, with Ether, Polkadot, and XRP all falling more than 7% in a single day.

Caroline Bowler, CEO of BTC Markets Pty Ltd, likened the sentiment to the 2022 ‘crypto winter,’ a period of prolonged downturn driven by rising interest rates and regulatory scrutiny.

“This drop can be seen as a reaction to Trump’s tariffs and overall geopolitical uncertainty,” she noted.

Trump’s Trade War & Its Impact on Crypto

The renewed trade tensions stem from Trump’s announcement that 25% tariffs on Canada and Mexico will take effect from March 4. Additionally, a 10% tariff increase on Chinese imports has triggered concerns over a global economic slowdown.

The result? A widespread ‘risk-off’ move, with investors fleeing speculative assets like cryptocurrencies in favor of safer investments.

The decline in Bitcoin price has also affected U.S. spot Bitcoin ETFs, which saw over $1 billion in withdrawals on Tuesday—their largest single-day outflow since launch.

Where Could Bitcoin Go Next?

According to technical analysis, Bitcoin has a support level around $70,000. While some experts believe this could be the next target, others warn that a more severe downturn may be possible if bearish sentiment persists across equity markets.

“The real panic may still be ahead of us,” said Bloomberg’s MLIV Executive Editor Mark Cudmore. “Bitcoin always has another 70%+ crash in its future, by construction.”

Stefan von Haenisch, Director of OTC Trading at Bitgo Inc., emphasized that traders are watching closely for Trump’s next steps in shaping crypto regulation, including any potential Bitcoin stockpile initiatives.

Trading Opportunities: Shorting Bitcoin & Profiting in the Downtrend

While Bitcoin’s decline might concern long-term investors, seasoned traders recognize the opportunities within the selloff. Unlike traditional stocks, crypto traders can profit from falling prices through short selling.

How Can Traders Capitalize?

• Short Selling: By borrowing Bitcoin and selling it at current prices, traders can buy back at lower levels and pocket the difference.

• Leveraged CFD Trading: Contracts for Difference (CFDs) allow traders to speculate on Bitcoin’s downward movements with high leverage.

• Hedging Strategies: Holding a mix of short and long positions can help mitigate risk and lock in gains during volatile periods.

• Altcoin Diversification: Some traders may look to alternative cryptocurrencies that historically outperform during Bitcoin downtrends.

Final Thoughts

Bitcoin’s drop is a reminder of the volatility that defines the crypto market. While the selloff may not be over, traders who understand how to navigate both bullish and bearish cycles can find ways to profit.

Are you ready to take advantage of market fluctuations? Get real-time trade alerts and expert insights—Join Our WhatsApp Channel now!

Disclaimer: Trading cryptocurrencies involves significant risk, and past performance does not guarantee future results. Always trade responsibly and seek professional advice where necessary.