Market panic spreads as Bitcoin plunges to its lowest level since November, with analysts split on whether this signals a deeper crash or the start of a major rally
Bitcoin dipped below $90,000 on Tuesday for the first time since November, shedding close to 8% of its value and sparking fear among crypto investors.
The sell-off also saw crashes in major cryptocurrencies like Ethereum, Solana, and XRP, which all lost between 10% and 15% of their market value.
These price declines have had a domino effect on wider market sentiment, which fell into “extreme fear” territory, according to the Crypto Fear & Greed Index.
Bitcoin has since partially recovered, now hovering around the $88,000 mark after hitting a low of $86,605.
Macroeconomic uncertainty and the Bybit hack add pressure
Besides last week’s $1.5 billion Bybit hack, analysts have highlighted renewed U.S. tariffs and Federal Reserve policy concerns as key drivers of Bitcoin’s decline.
On Monday, Donald Trump confirmed plans to impose a 25% tariff on imports from Canada and Mexico starting in March, escalating fears of a trade war.
Investors are also weighing the Federal Reserve’s next moves, with interest rate cuts becoming less likely as inflation remains persistent.
“The macroeconomic situation has been the main reason for the price decline in the last few hours,” Marcel Heinrichsmeier, crypto assets analyst at DZ Bank, told Reuters.
“The Bybit hack and the memecoin turmoil of the past few weeks have contributed to a generally worse mood in the crypto market than at the beginning of the year.”
Despite these concerns, some experts argue that Bitcoin’s long-term outlook remains bullish, pointing to monetary expansion and historical trends as potential catalysts for a rebound.
M2 global money supply could push Bitcoin to $150K this year
A growing number of analysts believe the expanding M2 global money supply—including cash, deposits, and other easily accessible funds—could trigger a Bitcoin rally in the coming months.
“This isn’t a market to bet your whole stash on a quick correction, but our central scenario is still for a strong March and beyond,” said Pav Hundal, lead analyst at Swyftx, in an interview with Cointelegraph.
X crypto analyst bitcoindata21 also pointed to a weakening U.S. dollar as a potential driver for Bitcoin’s next move. “[It’s] just a matter of time before Bitcoin realizes,” he said in a post on Tuesday.
Similarly, investment research firm Bravos Research suggested via an X post that “this liquidity surge could fuel Bitcoin’s parabolic run-up”.
Bitcoin’s historical price action offers additional reasons for optimism. According to crypto analytics platform Coinglass, March has delivered mixed results for Bitcoin in previous years.
However, some analysts believe current macroeconomic shifts could tilt the odds toward a strong recovery.
Despite ongoing volatility, Frank Speiser, CEO of Blockchain investment firm Metafide, remains confident that Bitcoin will end 2025 at $150,000.
“Right now, the market is panic selling and reacting to macroeconomic trends,” he told TheStreet.
“I think you might see Bitcoin slide a little bit further, but as I’ve previously said, I think the end of this year, Bitcoin $150,000 is within reach.”
