Crypto market shaken as Bitcoin drops over 20% from its peak: Is this the start of a bear phase?

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Bitcoin has fallen sharply, dropping over 20% from its January peak of $109,350, raising concerns about whether the crypto market has entered a bear phase.

On Thursday, February 27, Bitcoin hit an intraday low of nearly $83,000 before recovering to around $85,000. The sell-off has wiped out nearly $300 billion in market value, leading to increased volatility and investor anxiety.

Is crypto in a bear market?

Avinash Shekhar, Co-Founder & CEO of Pi42, believes that Bitcoin’s decline below $85,000 is the largest sell-off of 2025, with over 79,000 BTC sold at a loss in just 24 hours. “The crypto market has entered a bear phase with Bitcoin declining over 20% from its January peak of $109,350 to an intraday low of $83,740. ETF outflows and Trump’s EU tariff threats have further pressured the market, and BTC could experience a potential drop to $74K,” Shekhar said.

Adding to the uncertainty, altcoins have also suffered, with XRP’s open interest hitting its lowest level in 2025. Institutional selling and macroeconomic instability have shaken confidence, raising questions about whether this is a temporary correction or the start of a prolonged downturn.

Also Read: Bitcoin is a bubble and will blow up someday, says Jim RogersAnish Jain, Founder of W-Chain, acknowledges the ongoing debate about whether Bitcoin’s drop signals the start of a bear market. He argues that macroeconomic factors, including institutional blockchain adoption and regulatory clarity, play a crucial role in shaping market cycles.

“While some may view the drop as a bear phase, others see it as a buying opportunity,” Jain noted. He emphasized that long-term market fundamentals remain strong despite short-term volatility.

Also Read: Robert Kiyosaki sees Bitcoin crash as a buying opportunity, calls it 'Money with Integrity'

What should investors do now?

Ryan Lee, Chief Analyst at Bitget Research, pointed out that Bitcoin’s recent decline followed President Donald Trump’s proposal of 25% tariffs on the EU, which rattled global markets. The cryptocurrency, often seen as a risk-on asset, fell alongside equities amid trade war concerns and inflation fears.

“Over $4 billion in crypto liquidations intensified the sell-off, reflecting heightened investor caution. The $85,000–$90,000 range now serves as a critical support zone,” Lee said.

Despite the sharp decline, Bitcoin’s historical resilience and Trump’s pro-crypto stance suggest this could be a temporary correction rather than a full-fledged bear market. However, prolonged trade tensions and economic instability could signal a deeper downturn.

For investors, the key is to watch macroeconomic developments and technical support levels. If Bitcoin holds above $85,000, it may indicate consolidation before a recovery. If it breaks below, further downside toward $74,000 is possible.

While Bitcoin’s over 20% drop has triggered concerns of a bear market, experts remain divided on whether this is a temporary correction or a prolonged downturn. Institutional interest, regulatory developments, and macroeconomic trends will play a crucial role in shaping Bitcoin’s trajectory in the coming weeks.

Also Read: Pi Coin’s next move: Can it hit $100 and beyond?

(Disclaimer: Recommendations, views, and opinions expressed by experts are their own and do not reflect the views of The Economic Times.)

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