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Bitcoin extended its losses on Tuesday, dropping to its lowest level in six weeks, as renewed global trade tensions and a major cryptocurrency exchange hack rattled investor confidence.
Bitcoin Price Movements (as of 01:22 ET / 06:22 GMT):
- Bitcoin (BTC) fell 4.6% to $91,555.2, its lowest level since January 13.
Key Factors Driving the Decline
1. Trump’s Tariff Threats Weigh on Crypto Markets
- U.S. President Donald Trump reaffirmed plans to impose tariffs on Mexico and Canada, effective March 4, raising concerns over global trade disputes.
- Despite ongoing negotiations to strengthen border security and curb fentanyl trafficking, the Trump administration remains firm on its decision.
- Investors fear that these tariffs could increase inflation and weaken economic growth, affecting risk-sensitive assets like Bitcoin.
- Although Bitcoin is often seen as a hedge against economic uncertainty, the immediate market reaction suggests a flight to safety, with investors reducing exposure to volatile assets.
2. Bybit Security Breach Shakes Investor Confidence
- Dubai-based cryptocurrency exchange Bybit suffered a massive hack, with cybercriminals stealing approximately $1.5 billion worth of Ethereum (ETH).
- This phishing attack deceived Bybit executives into approving unauthorized transactions, marking one of the largest breaches in digital asset history.
- The breach eroded confidence in centralized exchanges, fueling fears of wider security risks in the crypto industry.
Market Outlook
- Bitcoin’s next key support level is around $90,000, with further downside risk if sentiment remains weak.
- If U.S. trade tensions escalate further, Bitcoin could see continued volatility, as investors reassess its role as a risk asset or safe haven.
- The Bybit hack could trigger stricter regulatory scrutiny on crypto exchanges, affecting market liquidity and trading volumes.
