On February 25, the cryptocurrency market plunged by $325 billion, losing 5,82% of its total market cap, which now stands at $2.97 trillion. Trading volume surged by 75,57% to $143.57 billion, indicating a massive sell-off. The Fear & Greed Index dropped to a record low of 25 — the lowest level since September 2024.
Key Reasons Behind the Market Drop
Analysts point to multiple factors contributing to the crash:
- Trump’s Tariff Announcement: U.S. President Donald Trump announced import tariffs on Canada and Mexico, set to take effect after March 4. Previously, both countries were given a grace period to address border security issues.
- $978.46M in Liquidations: A sharp wave of forced liquidations added to market pressure.
- Economic Uncertainty: Increasing fears of financial instability weighed on investors.
Bitcoin and Ethereum Struggle Amid Market Decline
Bitcoin (BTC) dropped below $90K to $89.3K — its lowest level since November 2024. With a market dominance of 62,26%, BTC's drop intensified the broader sell-off. Initially, Bitcoin held above key support levels, but after the S&P 500 crashed on Friday, BTC lost its $98K support level.
Adding to the sell-off, Citadel Securities announced its entry into the crypto market as a liquidity provider. Instead of boosting confidence, the news triggered a sell-off, as investors perceived it as a signal to exit.
Meanwhile, Ethereum (ETH) and other altcoins suffered even more:
- ETH: -11,31%
- Solana (SOL): -15,23%
- XRP: -10,92%
- BNB: -6,88%
Liquidity continues to drain from the market. In just one hour, total market capitalization dropped by $100 billion, marking the largest intra-day decline in months, according to Coinglass.
Solana Plunges Amid LIBRA Meme Coin Scandal
Solana’s recent turmoil stems from the controversy surrounding LIBRA, a meme coin backed by Argentinian President Javier Milei. The token first skyrocketed but later collapsed to near zero. Then, Milei reposted a guide on buying LIBRA, fueling another price surge.
Solana has since suffered a 22% decline since Friday, as major holders offload their positions. Additionally, a 1.72 billion SOL token unlock on March 1 threatens to put further downward pressure on prices.
Meme Coins Lose Liquidity
Meme coins, which saw explosive growth in recent months, are now seeing heavy outflows. Solana’s decline triggered a liquidity crisis, dragging meme coins down with it.
Even Dogecoin (DOGE), which had been strengthening after Elon Musk’s comments on downsizing the U.S. government, fell by 11,24%.
Bybit Hack and Market Reaction
The market downturn follows one of the largest crypto hacks in history — on February 21, North Korea-linked Lazarus Group allegedly stole $1.5 billion from Bybit.
Ethereum was hit the hardest, as investors feared a repeat of the FTX collapse, prompting mass withdrawals. Despite Bybit CEO Ben Zhou's assurances of compensation, trust in the exchange remains shaken.
Crypto Stocks Under Pressure
Publicly traded crypto companies are also suffering:
- Coinbase is down for the sixth consecutive day, marking its worst losing streak in months.
- MARA Holdings (a Bitcoin mining firm) lost 2,6% in a single day.
- Strategy (formerly MicroStrategy) declined despite continuing to buy Bitcoin.
Between February 18 and 23, Strategy purchased 20,356 BTC at an average price of $97.5K per coin, totaling $1.99 billion. The company now holds $47.7 billion in BTC, representing 2,5% of Bitcoin’s total supply.
Biggest Gainers and Losers
Despite the downturn, a few tokens managed to rise:
- IP: +26,12%
- DEXE: +3,88%
- PAXG: +0,16%
The top losers were:
- Sonic (formerly FTM): -18,45%
- SUI: -17,71%
- AAVE: -17,59%
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.