4 Reasons Why Bitcoin (BTC) Dumped by $13,000 Since Friday
The past few days have been rough for bitcoin (BTC), with the asset losing almost 13% of its value amid macroeconomic developments in the United States.
Data from CoinGecko shows that BTC has tumbled from $99,400 on Friday, February 21, to $86,300 today. Here are some of the potential reasons behind this massive crash that sent the primary cryptocurrency to its lowest levels in over three months.
Bybit Hack and Trump’s Tariffs
One major catalyst that drove bitcoin’s price downwards was the $1.49 billion hack against the crypto exchange Bybit on Friday. As soon as news of the hack emerged, BTC crashed by more than two grand, from almost $100,000 to $97,370. The plunge continued for several hours, and BTC eventually dropped to $94,909, according to CoinGecko’s data.
Over the weekend, the leading cryptocurrency recovered slightly and returned to the $96,000 range, where it hovered until Monday morning. In other words, the weekend saw BTC continue with the consolidation pattern it had recorded within the last 90 days or so.
However, by noon on Monday, BTC embarked on another downward trend driven by U.S. President Donald Trump’s remarks on trade tariffs against Canada and Mexico. The president said the tariffs on imports from both countries would go back into effect next week following a month-long delay in their implementation.
Recall that President Trump suspended the tariffs against Canada and Mexico earlier this month after the Canadian prime minister and the Mexican president pledged to reinforce their border-policing efforts. A few days before the suspension, Trump signed executive orders imposing 25% tariffs on products from Mexico and Canada and 10% on Chinese imports.
Bitcoin has reacted similarly each time Trump announced the implementation of the tariffs. The asset bled by at least 7.5% to $91,300 in early February and has now fallen below $87,000 following the president’s comments at a White House press conference on Monday.
U.S. Inflation Concerns
In addition to the latest update on Trump’s trade tariffs against Mexico and Canada, there have also been concerns about growing inflation in the United States.
Aurelie Barthere, Principal Research Analyst at the on-chain analytics platform Nansen, told CryptoPotato that the market is reacting to concerns about the slowdown in U.S. growth. This reaction was exacerbated after the release of the U.S. Services Purchasing Managers’ Index (PMI) last week; the indicator was at its lowest in 22 months and was consistent with the gross domestic product (GDP) growth tracking at 0.6%.
It remains to be seen if BTC will decline further or significantly recover from its current levels within the coming days.
ETF Outflows
Last but not least ranks the massive outflows from the spot Bitcoin ETFs in the States. Perhaps due to some of the reasons listed above, investors have switched their strategy when it comes down to the regulated financial vehicles tracking the largest cryptocurrency, and have recorded six consecutive days of net outflows. Moreover, 10 out of the last 12 days have been in the red.
February 24 was particularly painful as more than $516 million left the funds. February has become their worst-performing month since they saw the light of day in January 2024.
The combined pressure of all these developments has driven BTC south hard, and the asset is now deep below $90,000. Even bigger fears come from the fact that it has broken down from its three-month consolidation range, which could spell more trouble in the near future.
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