Bitcoin’s post-election rally fizzles as prices drop below $84,000
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Bitcoin's price tumbled to a four-month low on Wednesday, briefly hitting $81,000 as optimism surrounding the so-called "Trump bump" evaporated. The sharp decline, which marks a 20% drop since President Donald Trump’s inauguration, has pushed investors into a defensive stance, with a growing number of traders hedging against further downside. Open interest in Bitcoin options with a $70,000 strike price has surged, making it the second-most popular contract set to expire on February 28, according to data from Deribit.
Market sentiment has been weighed down by a mix of geopolitical and macroeconomic pressures. Trump’s aggressive tariff rhetoric has stoked fears of trade disruptions, while persistently high inflation expectations have added to investor caution. Chris Newhouse, director of research at Cumberland Labs, noted that tariff concerns are further dampening the outlook, compounding the bearish sentiment that has gripped the market since last week’s Bybit Ethereum (ETH) hack. The attack not only pressured ETH prices but also cast a shadow over the broader crypto landscape.
Investor confidence has also been shaken by a steep decline in demand for Bitcoin exchange-traded funds (ETFs). Over the past six days, Bitcoin ETFs have seen a staggering $2.1 billion in outflows, with more than $1 billion withdrawn from spot Bitcoin ETFs on Tuesday alone—the largest single-day exodus since these funds launched last year. Major funds such as the Fidelity Bitcoin Fund (FBTC) and BlackRock iShares Bitcoin Trust ETF (IBIT) have been among the hardest hit.
Meanwhile, Bitcoin perpetual futures have faced a sharp reduction in long positions, with approximately $2 billion in bullish bets liquidated over the past three days, per Coinglass data. This wave of selling reflects a broader shift toward risk aversion, with traders unwinding leveraged positions and exiting the market amid heightened uncertainty.
Ethereum and Solana have not been spared from the downturn. ETH’s price volatility has intensified following the Bybit hack, while Solana has given up much of its recent gains as enthusiasm for memecoins fades. The broader crypto market now finds itself in search of a new catalyst to reverse bearish sentiment.
“The crypto market is still in search of a new catalyst to reverse bearish sentiment,” said Ravi Doshi, co-head of markets at FalconX, reflecting the cautious stance among institutional investors.
For now, Bitcoin is attempting to stabilize near $84,578, though it remains down 4.5% over the past 24 hours. With geopolitical uncertainty, ETF outflows, and weakening investor confidence, the short-term outlook remains fragile unless a strong buying force emerges to absorb selling pressure.
Market sentiment has been weighed down by a mix of geopolitical and macroeconomic pressures. Trump’s aggressive tariff rhetoric has stoked fears of trade disruptions, while persistently high inflation expectations have added to investor caution. Chris Newhouse, director of research at Cumberland Labs, noted that tariff concerns are further dampening the outlook, compounding the bearish sentiment that has gripped the market since last week’s Bybit Ethereum (ETH) hack. The attack not only pressured ETH prices but also cast a shadow over the broader crypto landscape.
Investor confidence has also been shaken by a steep decline in demand for Bitcoin exchange-traded funds (ETFs). Over the past six days, Bitcoin ETFs have seen a staggering $2.1 billion in outflows, with more than $1 billion withdrawn from spot Bitcoin ETFs on Tuesday alone—the largest single-day exodus since these funds launched last year. Major funds such as the Fidelity Bitcoin Fund (FBTC) and BlackRock iShares Bitcoin Trust ETF (IBIT) have been among the hardest hit.
Meanwhile, Bitcoin perpetual futures have faced a sharp reduction in long positions, with approximately $2 billion in bullish bets liquidated over the past three days, per Coinglass data. This wave of selling reflects a broader shift toward risk aversion, with traders unwinding leveraged positions and exiting the market amid heightened uncertainty.
Ethereum and Solana have not been spared from the downturn. ETH’s price volatility has intensified following the Bybit hack, while Solana has given up much of its recent gains as enthusiasm for memecoins fades. The broader crypto market now finds itself in search of a new catalyst to reverse bearish sentiment.
“The crypto market is still in search of a new catalyst to reverse bearish sentiment,” said Ravi Doshi, co-head of markets at FalconX, reflecting the cautious stance among institutional investors.
For now, Bitcoin is attempting to stabilize near $84,578, though it remains down 4.5% over the past 24 hours. With geopolitical uncertainty, ETF outflows, and weakening investor confidence, the short-term outlook remains fragile unless a strong buying force emerges to absorb selling pressure.