Why Is Bitcoin Going Down? BTC Price Tests 3-Week Low amid Strong Dollar, Weak Wall Street ⋅ Crypto World Echo
Bitcoin(BTC) price continues its fourth day of decline, testing the lowest levels innearly a month on Monday, February 3, 2025. Since last Friday, the dropsreached almost 14% at one point, reacting to reports about new tariff plansfrom the new-old U.S. President Donald Trump.
The suddenBTC slump also triggered panic in altcoins, causing a temporary flash crash.Let’s examine why Bitcoin is falling and what caused such a strong reaction inthe cryptocurrency market.
Why Is Bitcoin Price DownToday? Trump’s Tariffs Shake Markets
DonaldTrump announced on Sunday that he’s imposing 25% tariffs on neighboring Canadaand Mexico. The new rules are set to take effect on Tuesday, and the presidentsimultaneously announced that similar trade fees will soon be imposed on theEuropean Union (EU).
Inresponse, Wall Street futures contracts recorded a significant decline: Dowdropped 1.4% (over 600 points), and S&P 500 futures fell 1.9%. Thetech-heavy Nasdaq slid 2.4%. The U.S. dollar automatically surged, rising 1%against a weighted basket of currencies.
Given thismarket configuration and panic, Bitcoin’s decline was almost inevitable.
Bitcoin iscurrently trading at $95,700, down 2.3% compared to Sunday’s close. However,the decline was much steeper, reaching almost 7% at one point overnight.Bitcoin is now in its fourth consecutive day of decline, during which it hasfallen about 14% and is testing the $91,281 level, the lowest since January 13.
“Thewriting was on the wall,” said Nigel Green, the CEO of financial firm deVere Group. “This was entirely foreseeable. Yet, toomany market participants buried their heads in the sand, convinced that theworst wouldn’t materialize. Now, the consequences are here, and investors needto act—fast.”
Will Bitcoin Fall? BTC TechnicalAnalysis Shows Strong Support
DespiteMonday’s decline triggering panic in the cryptocurrency market and a wave ofleveraged position liquidations, Bitcoin still maintains strong support. Forover two months, BTC has held above $92,000, which marks the lower boundary ofthe current consolidation.
This levelhas been tested eight times, most actively at the turn of the year, each timeproviding bulls with a defense line. The last test, appearingas a bullish pin bar two weeks ago, was a signal for growth that pushedBitcoin to new historical highs onJanuary 20 at $109,312.
Investorsshould closely watch how Monday’s session closes. If the $92,000 level holdsand the session ends significantly higher—around current levels, for example—itwill signal that buyers are ready to defend this level and accumulate BTC inits vicinity.
But what ifa breakout occurs? In that case, the $83,000 area will become critical, as italigns with the 200 EMA, which serves as both support and an indicator that theuptrend has remained intact since October. Only a drop below this movingaverage would signal to me that sellers are gaining momentum.
“The markets will remain highly reactivein the coming days and weeks. Investors must position themselves strategicallyto mitigate risks and seize opportunities as assets reprice,” Green added.
Altcoin Bloodbath: Ethereum,XRP, DOGE and TRUMP Down
WhileBitcoin’s decline remained within the volatility standards we’re accustomed toin cryptocurrencies, thesituation with altcoins was far more severe:
- Ethereum (ETH) fell over 20%, testing $2,150 and August lows
- XRP contracted by more than 30%, dropping to just $1.8, the lowest since December
- Dogecoin (DOGE) declined 25%, testing $0.27
- Donald Trump’s meme coin TRUMP lost about 17%, trading at $17.5, significantly below its Binance debut price of $27
Mass Liquidations of $2.3Billion
The scaleof the decline in the cryptocurrency market is perfectly illustrated by leveragedposition liquidation data. Over the last 24 hours, $2.26 billion in leveragedpositions were wiped out, including $1.88 billion in long positions. The mostliquidations were observed not in Bitcoin ($411.8 million) but Ethereum($611.6 million), which experienced one of the most severe drops.
The fearand greed index automatically fell to 39 points, indicating fear amongcryptocurrency investors. The total ecosystem volume shrank to $3.11 trillion,falling to the lowest levels since November.
Bitcoin Price, FAQ
Why Bitcoin price isfalling?
The primarycatalyst has been Donald Trump’s announcement of new trade tariffs, whichsparked broader market uncertainty. The cryptocurrency market, increasinglycorrelated with traditional financial markets, reacted strongly to this news.Additionally, the strengthening U.S. dollar and declining stock futures havecreated a risk-off environment where investors are moving away from volatileassets like cryptocurrencies.
Will BTC rise again?
Thecryptocurrency maintains strong technical support around $92,000, which hasproven to be a reliable defense line over the past two months. The upcomingBitcoin halving event in 2024, combined with increasing institutional adoptionand the success of spot Bitcoin ETFs, provides a solid foundation for potentialfuture growth. However, short-term volatility should be expected as the marketdigests current geopolitical and economic uncertainties.
What is causing crypto tofall today?
The currentcrypto market downturn is primarily driven by macroeconomic factors and marketsentiment. Trump’s protectionist trade policies have triggered a broader marketsell-off, affecting both traditional and crypto markets. This has led tosignificant liquidations of leveraged positions, particularly in altcoins,creating a cascade effect across the cryptocurrency ecosystem. The fear andgreed index dropping to 39 points reflects the current market anxiety,contributing to the selling pressure.
What will be the price ofBitcoin in 2025?
While someanalysts project potential prices ranging from $150,000 to $250,000 by 2025,citing institutional adoption and scarcity after the halving, these predictionsshould be viewed with caution.
This article was written by Damian Chmiel at www.financemagnates.com.
