Cryptocurrency markets have experienced extreme volatility recently, with dramatic swings that have left investors reeling. Last week began with a significant sell-off, turning the entire market deep red as traders frantically searched for support levels while selling pressure mounted.
The current market instability can be traced back to February 21, 2025, when Bybit suffered a catastrophic security breach. Digital assets worth nearly $1.5 billion were stolen in what analysts are calling the largest hack in cryptocurrency history. Intelligence agencies indicate that North Korea's Lazarus Group is likely responsible for the incident.
The impact on Bitcoin was immediate and severe. BTC closed at approximately $96,000 on February 21 and steadily declined over the following week, bottoming out at $78,000 by February 28—representing a stunning 20% drop. This significant decline severely damaged investor confidence.
Beyond the hack, macroeconomic factors have contributed to Bitcoin's downward trajectory. Late February saw President Trump announce a 25% import tariff on goods from Canada and Mexico. This policy declaration sent shockwaves through global financial markets, triggering a widespread sell-off of risk assets, including cryptocurrencies, which further depressed prices.
In a stunning development this past Sunday evening, President Trump unexpectedly announced a cryptocurrency strategic reserve plan. The initiative would include Ripple’s XRP, Cardano's ADA, and Solana's SOL, with Bitcoin (BTC) and Ethereum (ETH) added to the mix shortly after.
The announcement energised the market, leading to significant short-term growth.
However, as markets opened on Monday and investors began processing the information more thoroughly, a massive sell-off ensued. BTC and ETH plummeted below their Sunday opening prices, triggering liquidations on both sides of the market exceeding $1 billion.
The crypto community—a significant contributor to Trump's electoral success—is now growing sceptical. Many market participants view the president's announcement as pure market speculation designed to manipulate prices. The timing has raised suspicions that the announcement was strategically planned to allow institutional investors to exit positions, particularly in Solana, which had a major token unlock of approximately $2 billion on Saturday, March 1.
The Sunday night announcement appears to have been calculated to draw in retail investors, only for institutional players to sell into the rally when markets officially opened on Monday. This pattern, if repeated, risks alienating a core supporter base that helped secure Trump's decisive election victory.
Adding to the controversy, shortly after Trump’s announcement, Eric Trump—who is widely perceived by the market as an Ethereum supporter—retweeted the news, stating that the Sunday night announcement was great for retail.
However, in reality, it turned out to be a disaster for them.
From a technical analysis perspective, the market continues to display bearish characteristics. The crucial question now is whether Bitcoin can maintain support above the $78,000 level. Should this support fail, we could potentially see Bitcoin drop into the $60,000 range. Conversely, if support holds, it might establish the foundation for a new uptrend.
Ultimately, the broader macroeconomic environment for cryptocurrencies in the United States will determine the market's direction. Investors should stay vigilant and adapt to shifting conditions.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
