Bitcoin crashes to $78,500 as crypto bloodbath wipes out $1 trillion

Bitcoin’s price has slipped below $80,000, extending a sell-off that has wiped out $1 trillion from the cryptocurrency market. The downturn has sparked concerns about further declines.

The world’s largest cryptocurrency has fallen about 25% from its all-time high of nearly $110,000, with some market insiders pointing to “price suppression” as a factor in the decline.

The slide continued on Friday, sending Bitcoin to its lowest level in more than three months, erasing gains that followed Donald Trump’s election win. During Asian trading hours, Bitcoin hovered around $78,782, down 5.5% for the day. By 8:45 AM, it had slipped further to $78,495.84, marking a 7.2% drop from the previous close. Bitcoin is now trading at $81,055 as of the time of writing.

“Bitcoin, the biggest cryptocurrency, has fallen 21% from a January 20 peak and is back to levels seen shortly after Trump’s U.S. presidential election victory in November, as hopes for a strategic bitcoin reserve fade and tariff threats weigh on demand for speculative assets,” Reuters reported.

The broader crypto market has been hit hard, with values dropping sharply since December.

What’s Driving the Bitcoin Decline?

Economic Uncertainty: The announcement of new tariffs on Mexico, Canada, and China by President Trump has raised concerns about inflation and economic growth. Investors tend to move away from assets like Bitcoin in uncertain conditions.

Regulatory Pressure: The Securities and Exchange Commission’s latest move—suggesting the dismissal of a lawsuit against Coinbase—has only added to market volatility. Traders are watching regulatory developments closely.

Market Trends: Options data suggests traders are preparing for further declines, with a spike in put options targeting the $70,000 range.

Where Does Bitcoin Go from Here?

Bitcoin surged following Trump’s November victory, as he positioned himself as a pro-crypto candidate. That momentum has now faded, with investors pulling back from riskier assets amid a weak global stock market, ongoing trade tensions, and uncertainty over conflicts in Ukraine and Gaza.

With some analysts cautioning against buying the dip, questions remain about how far Bitcoin might fall.

“The next key level is around $70,000, which serves as a strong support zone,” said Ruslan Lienkha, chief of markets at crypto platform YouHodler. “That said, we’ll only see this level if negative sentiment continues to dominate equity markets. U.S. stock indices have been in the red for days, but this could still be a temporary correction rather than a prolonged downturn.”

Markus Thielen, founder of 10x Research, pointed to Bitcoin’s technical pattern, which suggests a possible move into the low $70,000s.

Meanwhile, broader sentiment in the crypto space remains fragile.

“The market is extremely nervous, with the Crypto Fear & Greed index dropping to 21—the lowest reading since September,” said Agne Linge, head of growth at decentralized banking platform WeFi.

As new tariffs on Canada and Mexico take effect on March 5, traditional markets are reacting to the potential fallout. Investors looking for stability are shifting away from volatile assets like Bitcoin, at least for now.