Bitcoin Price Drop: What’s Behind It and Should Investors Worry :2025

Bitcoin, the most popular kind of cryptocurrency, has had a very sharp downward movement recently, which has raised concerns among investors. Come Tuesday afternoon, the Bitcoin Price sank below $88,000, marking this as the lowest price since November. This sudden price decline has taken place against the backdrop of wider macroeconomic worries and uncertainty faced in the marketplace that has been downgrading stocks on traditional markets and the crypto markets alike.

What Is Causing Bitcoin Price to Drop?

There are many reasons contributing to the sudden drop in value of Bitcoin. A major triggering event for the slump has been due to fears relating to tariffs, especially those imposed by the Trump administration on Canada and Mexico. Trump has since said tariffs are going to go ahead, which are causing angst about possible inflation and resulting interest rate actions.

Bitcoin had run well above $100,000 after the Trump election, buoyed by hopes that his administration would take some favorable action towards Bitcoin. He had promised the U.S. would be a leader in cryptocurrency adoption, and that got many investors very excited. But as worries about the economy have increased, that excitement is reducing.

Adding to this, the consumer confidence report released on Tuesday offered a much higher-than-expected drop. The market, therefore, reacted widely to the general news, and pullbacks extended all the way to assets like Ethereum, Solana, and Bitcoin. As Paul Schatz, the president of Heritage Capital, explains: “The market changed from ‘risk-on’ to ‘risk-off’; and now people are understandably clinging to safer assets like bonds and consumer staples”.

Schatz asserts that a crowd of investors found Bitcoin to be pretty safe, but are now finding the hard nut to crack. Bitcoin went about 20% down since Trump assumed office, showing a considerable change in sentiment right now.

The Regulatory Climate and Security Threats

The biggest unknown about the future of Bitcoin is how now regulations will develop. Some analysts believe that the crypto market requires law and order more than anything else.

Just recently, two Republican lawmakers—Reps. French Hill (R-Ark.) and Bryan Steil (R-Wis.)—called out Washington for not having clear regulations for digital assets. Their op-ed states that workable laws and proactive regimes protect consumers while allowing legitimate crypto projects to flourish.

Security concerns continue to plague the crypto industry. A large-scale security breach in Dubai’s crypto exchange Bybit allowed hackers to pocket $1.5 billion of digital assets. Investigators suspect that North Korea is behind this hack, as the country has been tied to several other crypto hacks in the limelight over the last few years.

Ben Zhou, Bybit’s chief executive officer, assured the customers that the exchange is actually in a strong position to financially back all customer assets, yet this once again brings the spotlight on the risk of holding funds on crypto exchanges.

Investor Confidence Continues to Be Eroded by Crypto Scandals

Another issue added to the weight on the crypto market is a scandal involving Argentina’s president, Javier Milei, who is being probed for allegedly promoting a meme coin called LIBRA, which dramatically shot up and crashed following his endorsement. While Milei has denied all wrongdoing, the case has worsened concerns about volatility and no oversight in an already murky crypto space.

At the same time, major outflows are hitting the Bitcoin-based ETFs. LSEG data shows that $644 million flowed out of those ETFs last month, marking the biggest monthly outflow since their launch in early 2024.

How Low Will Bitcoin Go?

With Bitcoin’s recent drop, many traders wonder whether it’s still downhill from here. The consensus among some analysts is that the currencies might drop ever further before establishing a proper support ground.

Crypto-expert Michaël van de Poppe said that Bitcoin could fall within the range of $83,000-$87,000 before showing any upward movement, while Paul Schatz says it could fall further by anywhere between 25 and 50 percent this year.

Regardless, this bearish scenario is not an argument for not including Bitcoin in anyone’s portfolio, Schatz says. “The proper number really just depends on an individual risk tolerance, but should be in the single-digit percentage range,” he said. He also thinks that if Bitcoin trades below $80,000, it would be a great opportunity to buy.

Key Levels to Watch

According to technical analysis, the chart of Bitcoin shows some interesting formations. After peaking at record highs, the cryptocurrency formed a double-top bearish pattern, signaling a downward move.

If Bitcoin turns bearish and sells off, the following support levels would be of interest:

$80,400: This level is near the 200-day moving average and may offer a place for buyers to step in.

$74,000: That level historically has been strong support, coinciding with previous resistance levels.

Resistance levels of note if Bitcoin has a rebound include:

$98,500: This is at the 50-day moving average level and has offered resistance in the past.

$106,000: Should Bitcoin be able to break above this level, it would attempt to retest its previous highs.
What Is Next for Bitcoin?

In the days ahead, Bitcoin price dynamics will depend on an array of exogenous factors, including regulations, state of the economy, and mood in the markets.

Traditionally, March has been a mixed bag for Bitcoin. Over the last 10 years, the tally of gains has been almost equal to that of losses. Given steady nerves on the economic front, restrictions could spell further downside for Bitcoin. Conversely, should the regulators declare anything mildly favorable for crypto, that is the lift Bitcoin needs to turn things around.

For whatever reason, Bitcoin is still up 25% since the US presidential election. This somewhat underscores the long-term bullish sentiment in the

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