The cryptocurrency market suffered a steep decline on Feb. 28, with the total market capitalization plunging by 6.4% to around $2.65 trillion. The sharp downturn followed escalating US tariff tensions, which triggered a risk-off sentiment among investors, leading to panic selling across the crypto sector.
US Tariffs Trigger Crypto Sell-Off
US President Donald Trump confirmed on Feb. 27 that planned tariffs on Canada and Mexico would take effect on March 4, with an additional 10% tariff on China set to increase pressure on global trade. As a result, investors flocked to the US dollar, causing a downturn in equities and crypto assets alike.
Bitcoin (BTCUSD) was among the hardest hit, falling below $80,000 for the first time since Nov. 10. The leading cryptocurrency dropped 9.5% from its Feb. 28 high of $86,988, currently trading around $79,400.
The sell-off rippled across the crypto market, with:
- Ethereum (ETH) dipping to $2,000, marking a 10% daily loss.
- XRP, Solana (SOL), and BNB (BNB) shedding 9–10% of their value.
- Dogecoin (DOGE) and Cardano (ADA) experienced the largest declines among the top 10 assets, each losing 11% in 24 hours.
Additionally, over $879 million in leveraged positions were liquidated, including $380.5 million in long Bitcoin positions—mirroring the $1.25 billion in long liquidations from Feb. 3. The dominance of long liquidations suggests that the market was overly bullish, leaving traders vulnerable to sudden sell-offs.
Stock Market Weakness Fuels Crypto Downturn
The latest correction in the crypto market aligns with a broader pullback in US equities, as major stock indices also faced declines:
- S&P 500 dropped 1.94%, closing at 5,861.57.
- Nasdaq Composite fell 2.75%, losing 581 points.
- Dow Jones marked its second consecutive daily loss, slipping 0.5% to 43,239.50.
Market analysts have noted Bitcoin’s increasing correlation with traditional financial markets, suggesting that crypto assets are moving in tandem with stocks rather than acting as a hedge against economic uncertainty.
Key Technical Levels for Crypto Market Recovery
The combined market cap of all cryptocurrencies (TOTAL) lost crucial support at the 50-week simple moving average (SMA) of $2.58 trillion, now flipping into resistance. The weekly RSI dropped from 56 to 42, indicating that market momentum still favors the downside.
Bears are now targeting a key support zone between $2 trillion and $1.69 trillion, where long-term moving averages (100-week and 200-week SMAs) could act as strong support.
However, if buying pressure increases, TOTAL could reclaim the 50-week SMA and surge back above $3 trillion, suggesting a possible bullish accumulation at lower levels.
Will the Crypto Market Rebound?
Despite the sharp decline, analysts remain cautiously optimistic about a potential rebound in the coming weeks. With institutional interest in crypto growing and macroeconomic uncertainties persisting, investors may see this dip as a buying opportunity.
As the market navigates heightened volatility, traders should remain vigilant and consider the broader economic landscape when making investment decisions.
