Bitcoin Plummet 16%! Buy the Dip or Run?

Over the past week, Bitcoin has suffered a significant drop, plunging 16%—its largest weekly decline since the collapse of the FTX crypto exchange in November 2022. As of publication, Bitcoin is trading near $80,000, down over 25% from its peak of $110,000. 

Other cryptocurrencies have suffered even heavier losses, with Ethereum tumbling from $4,200 to $2,000, effectively halving in value.

Why Is Bitcoin Dropping?   

Market analysts widely attribute Bitcoin's recent decline to growing global risk aversion triggered by two key factors: Trump's continued tariff hike rhetoric and the Federal Reserve's hawkish stance.    Investors have been selling off risky assets, including equities and cryptocurrencies.

The idea of Bitcoin as an inflation hedge and safe-haven asset was thoroughly discredited during the 2022 bear market. Today, Bitcoin moves in close correlation with U.S. equities, particularly tech stocks. Given that the stock market has also seen a sharp sell-off recently, Bitcoin's decline reflects broader market sentiment.

When Trump first took office, he appointed officials favorable to cryptocurrency, fueling excitement that helped Bitcoin break above $100,000. However, the market's bullish sentiment has since faded, and the Trump administration has yet to introduce any concrete policies to boost crypto investment. Worse yet, Trump and his wife have personally contributed to investor skepticism.    Trump's own TRUMP memecoin has lost 50% of its value since its launch, while MELANIA, a token linked to his wife, has plummeted 90%. These losses have further eroded investor confidence.

Another major factor contributing to the sell-off is the recent wave of high-profile cryptocurrency thefts. The most significant was the February 21 hack of Bybit, a crypto exchange, in which hackers stole approximately $1.5 billion worth of Ethereum—the largest theft in the industry's history.

Data from crypto analytics firm SoSoValue shows that since February 2025, Bitcoin spot ETFs have seen net outflows of $3.4 billion. On February 25, when Bitcoin broke below $90,000, ETF outflows hit a record $1.13 billion in a single day—the highest since Bitcoin ETFs were introduced. Historical trends suggest that significant ETF inflows or outflows often signal major price turning points for Bitcoin.

Buy the Dip or Escape the Crash?   

Some analysts warn that Bitcoin's downtrend is far from over.

Bloomberg strategist Mark Cudmore cautioned, "The real panic may be ahead of us still. Bitcoin always has another 70%+ crash in its future, by design. The $72K-$74K range appears to be a critical technical level that could trigger the next crypto winter."

Investors are now closely watching to see how much further Bitcoin could fall. Ruslan Lienkha, Chief of Markets at crypto platform YouHodler, noted that technical analysis suggests support around $70,000 but warned against assuming the worst-case scenario will materialize.

On the other hand, crypto bulls argue that this is a prime buying opportunity.

Joel Kruger, a market strategist at LMAX, sees a potential turning point in March: "There will be an opportunity for Bitcoin to shine if global markets experience intensified stress. If Bitcoin drops into the $70,000 to $75,000 range, it may start demonstrating its true store-of-value properties rather than moving in lockstep with stocks and risk sentiment."

He added, "Within the darkness of the pullbacks, there will be a silver lining.    Bitcoin's resilience through this downturn will help solidify its maturity as an asset."