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Bitcoin investors are bracing for further declines as the recent decline in the BTC price has led to increased hedging activity, according to some analysts.
As the so-called “Trump coup” fades in financial markets, Bitcoin options data suggests investors are positioning themselves against a potential drop to $70,000, a level last seen shortly after the U.S. election.
Bitcoin has fallen nearly 20% from its all-time high since Donald Trump took office in January. Trump’s confrontational approach to geopolitical allies and rivals has fueled the decline, making investors nervous. Additionally, concerns about persistently high inflation have further weighed on market sentiment. The cryptocurrency sector also suffered a major setback last week when the Bybit exchange was hacked to record levels.
“Tariff policies are further deteriorating the outlook and stubbornly high near-term inflation expectations are adding to the overall caution,” said Chris Newhouse, research director at Cumberland Labs. “The Bybit exchange hack has added additional downward pressure on the price and weighed on sentiment.”
The four-day drop of nearly 13% is the biggest drop since August.
“Ethereum in particular has felt the brunt of the Bybit incident, driving up volatility,” Newhouse said, adding, “Solana itself is giving up gains seen over the last few months, catalyzed by the pause in the memecoin craze.”
As investors move in an increasingly cautious environment, many are choosing to wait and exit cryptocurrencies amid market uncertainty.
“The crypto market is still searching for a new catalyst to reverse the downtrend,” said Ravi Doshi, co-head of markets at crypto brokerage FalconX.
*This is not investment advice.
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