Bitcoin Investors Panic as Prices Plummet Below $85K Amid FTX Turmoil
As of February 26th, investor confidence took a major hit as Bitcoin (BTC) nosedived to $82K, marking a continuation of its downward trend below the $85K mark.
The crypto market’s fear and greed index hit a 3-year low of 10, reflecting a high level of anxiety similar to the ‘extreme fear’ observed during the FTX crisis in 2022.
Market Reaction to Trump’s Actions
Following President Trump’s decision to impose a 25% tariff on the European Union and rising concerns over inflation, market volatility increased leading to further Bitcoin price erosion, as reported by QCP Capital, a crypto options trading desk.
QCP Capital’s daily market update highlighted the impact of Trump’s tariffs, stating, “Equities, gold, & BTC are sliding as stagflation fears gain traction. Consumer sentiment is weakening, while inflation expectations remain high.”
Analysts fear that the tariffs could aggravate inflation levels, consequently driving up prices across various sectors.
Earlier in the week, Bitcoin dipped below $90K after Trump hinted at imposing similar tariffs on Canada and Mexico starting from the 3rd of March.
The looming threat of persistent inflation could thwart the Federal Reserve’s plans for rate cuts. Market experts are closely monitoring the PCE inflation data due to be released on Friday to gain insights into Bitcoin’s future trajectory.
Conversely, some analysts, including Ken Teng (Chicken Genius), view the extreme fear in the market as a potential sign of a bottoming out phase and anticipate a rebound in Bitcoin’s price since it has not yet reached its peak.
Teng stated, “Clear indication of bottom; cycle tops out far from here, and it’s the final phrase I’m most looking forward to.”
Meanwhile, BTC trader Cryp Nuevo speculated that Bitcoin might slide to around $77K-$78K, aligning with the overlapping area of the CME gap and the weekly moving average, suggesting a probable price correction.
Despite hitting a low of $82.2K, Bitcoin managed to bounce back by 5% to $86.5K at the time of publication. Traders are now observing whether Bitcoin will regain its position above $90K or plummet further to $77K.