Why Is Bitcoin Crashing and Will BTC Recover or Crash Hard Next?

Bitcoin has dropped below the critical $80,000 mark for the first time in four months, sending shockwaves across the crypto market. At the time of writing, Bitcoin was trading at $80,100.25, after an intraday drop of 5.51%, with a market cap of $1.59 trillion and a 24-hour trading volume of $79.27 billion. Over the past week, Bitcoin crashed from a high of $99,420 to $78,547.11, marking an over 18% decline.

Source: CoinMarketCap

Interestingly, this BTC drop comes after Michael Saylor purchased $2 billion worth of Bitcoin on February 25. Since then, Bitcoin is down nearly 17%, raising questions about what triggered this sudden market downturn.

Why is Bitcoin Crashing: Reasons Behind the BTC Crash

Whales Moved Bitcoin: Increased Selling Pressure

One of the major reasons why Bitcoin is falling is the movement of large amounts of BTC by whale investors. According to analyst Ali Martinez, over 40,000 Bitcoin were transferred in the past 96 hours. Data from Santiment indicates that Bitcoin’s price decline coincided with a sharp drop in whale holdings (wallets holding 10,000 - 100,000 BTC). 

Source: X

This suggests that major holders could be offloading BTC, adding to the selling pressure and impacting market liquidity.

Trump Tariff Policy Adds Market Uncertainty

Another key reason why Bitcoin is crashing is related to global economic uncertainty. U.S. President Donald Trump announced a 10% tariff on Chinese goods and reaffirmed a 25% tariff on imports from Mexico and Canada, effective from March 4. This move has unsettled investors, raising concerns over trade relations and economic stability. As a result, riskier assets, including cryptocurrencies, have suffered losses, adding fuel to the crypto market crash.

Social Sentiment Shift: A Sign of a Bottom?

Social sentiment around Bitcoin has turned sharply negative, further influencing the Bitcoin crash. Historically, such moments of extreme pessimism have been followed by price rebounds. Similar sentiment dips in September 2023 and November 2022 led to 40-50% price surges in the following months. 

If past trends hold, contrarian traders might view this as an opportunity, suggesting that Bitcoin could go back up soon.

Will Bitcoin Recover? Strong Support for Bitcoin

Institutional and National Accumulation

Despite the market downturn, some investors see this as a buying opportunity. Bitwise recently bought $17.6 million worth of Bitcoin, while El Salvador has added 10 BTC in the past seven days. Will Bitcoin rise again? This institutional and national buying suggests that long-term believers are still accumulating.

Strong Statements from Michael Saylor and Robert Kiyosaki

Prominent Bitcoin advocates remain unfazed. Robert Kiyosaki emphasized that the crypto market crash is not a Bitcoin problem but a symptom of a broken financial system. He pointed out that U.S. debt has soared to $230 trillion, making alternative assets like Bitcoin and gold more appealing. Meanwhile, Michael Saylor doubled down on his bullish stance, urging people to buy more Bitcoin, even jokingly suggesting, “Sell a kidney if you must to buy more #Bitcoin.”

Bitcoin Price Prediction: Will Bitcoin Go Up Today or Drop Further?

From a technical standpoint, Bitcoin is currently below its 200-day moving average—a bearish indicator pointing towards a possible downtrend. The Relative Strength Index (RSI) has dropped to 21, which signals that Bitcoin is oversold.

Bearish Case: How Low Will Bitcoin Go

If Bitcoin fails to hold above $80,000, the next major support lies at $74,000, a level that has previously acted as strong resistance. Open interest in Bitcoin derivatives has also declined by 6.33% to $49.99 billion, indicating a weakening bullish momentum.

Bullish Case: A Bounce Back to $91,500?

However, if Bitcoin rebounds from this critical $80,000 level, it could quickly rise to $85,000 or even test $91,500 in the near future. Will Bitcoin recover? While uncertainty remains, historical data suggests that sharp dips often create opportunities for long-term investors.

With institutional investors like Bitwise and nations like El Salvador buying the dip, and bullish advocates standing firm, the possibility of a rebound remains open. All eyes are on the $80,000 support level, which could determine Bitcoin’s next major move.