Bitcoin (BTC) has plunged below the critical $90,000 level, marking a significant downturn in the crypto market. The sharp decline, fueled by macroeconomic uncertainty and crypto-specific risks, has triggered over $1.36 billion in liquidations, primarily wiping out long positions.
Mass Liquidations and Market Panic
BTC dropped 7.2% in just 24 hours, reaching $88.3K—its lowest level since the November 2024 U.S. presidential elections. According to CoinGlass, over $536 million worth of Bitcoin orders were liquidated, with Binance seeing the largest single liquidation of $20.8 million.
Despite Bitcoin’s fall, altcoins like Ethereum (ETH) and Solana (SOL) suffered even heavier losses, plummeting 13% and 15%, respectively. The broader crypto market erased nearly $2.96 trillion in value.
Stock Market and Tariff Uncertainty Weigh on Crypto
Global markets mirrored the crypto downturn, as major indices faced pressure. The Nasdaq shed 1.21%, slipping into negative territory for 2025, while the S&P 500 declined 0.5%. Tech stocks saw significant pullbacks, with Palantir losing 10.5% and Nvidia falling 3%.
A key driver of the risk-off sentiment was Donald Trump’s confirmation of a 25% tariff on Canada and Mexico, set to take effect on March 4. The news rattled investors and added to fears of economic deceleration.
Bitcoin ETFs: More Arbitrage Than Long-Term Investment?
Bitcoin ETFs have been a major force in the market, with U.S. spot Bitcoin ETFs attracting $39 billion in net inflows since their launch in January 2024. However, data from 10x Research suggests only $17.5 billion (44%) of that represents long-term investment, while 56% has been driven by arbitrage strategies.
As funding rates decline, hedge funds and trading firms are unwinding their ETF positions. Last week alone, Bitcoin ETFs saw $552 million in net outflows, exacerbating downward pressure on BTC.
MicroStrategy’s Decline: A Warning Sign?
MicroStrategy, the largest corporate Bitcoin holder, has come under scrutiny as its stock price slumped 16.25% in just five days, reaching its lowest point since November 2024. The company’s strategy of leveraging debt to buy Bitcoin amplifies risk—if its stock continues falling, broader market sentiment may deteriorate further.
Where Does Bitcoin Go Next?
With Bitcoin breaking below $90,000 and liquidations mounting, the short-term outlook remains fragile. However, some investors view this as an accumulation opportunity. Michael Saylor, a staunch Bitcoin advocate, emphasized that BTC is “on sale,” reinforcing his firm’s continued acquisitions.
For traders and investors, the question remains: is this dip a sign of deeper trouble, or does it present a strategic entry point before the next market rebound? As always, market conditions should be evaluated carefully before making any investment decisions.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.
