Bitcoin tumbled to its lowest level since Donald Trump's return to the White House on Tuesday, completely erasing the gains the flagship digital asset had accumulated since the US presidential election. Despite the Trump administration's crypto-friendly posture and a surge in institutional adoption, Bitcoin has plummeted more than 40% since hitting its all-time high in October 2025.
Data from CoinMarketCap showed a broad acceleration in the decline of cryptocurrencies during Tuesday's US midday trading session on February 3rd. Bitcoin briefly fell below $73,000, dropping over $6,000 and nearly 8% from its intraday high above $79,100 reached in the early Asian trading session, hitting its lowest level since early November 2024, after Trump's election victory.
Ethereum, the second-largest cryptocurrency by market capitalization, experienced a steeper decline. During the US midday session, it fell below $2,110, reaching its lowest point since May 2025, and shedding just over 10% from its daily high above $2,350 seen in early Asian trading.
Although Bitcoin quickly recovered above $74,000 thereafter, it has still accumulated a loss of over 15% since the start of 2026. Investor concerns about economic headwinds continue to intensify, with stock markets struggling to rebound amid low risk appetite and fears of an AI bubble, pushing cryptocurrency market sentiment to rock bottom. Augustine Fan, a partner at Hong Kong crypto options platform SignalPlus, noted, "Crypto sentiment is hitting a bottom, and the market is trading in bear market mode."
Leveraged liquidations exacerbated the selling pressure.
On Tuesday, Bitcoin broke below the yearly low of under $74,500 set on April 7, 2025, a period when Trump's announced so-called reciprocal tariff plan rattled global financial markets. Bohan Jiang, a senior derivatives trader at FalconX, commented, "Many traders attempted to buy the dip, betting on a rebound above $80,000. As Bitcoin continued to trend lower, a significant number of positions were liquidated, putting additional pressure on the price."
The cryptocurrency market has faced persistent downward pressure since the sell-off in October 2025. Additional comments on tariffs from Trump at that time triggered a severe wave of liquidations, wiping out $19 billion in leveraged token bets, from which the broader crypto market has yet to recover. Apart from the price turbulence in April, Bitcoin had largely maintained its position above $75,000, a level reached the day after Trump's re-election.
Institutions hold firm while retail investors retreat.
While some institutional holders remain steadfast, retail participation has declined as major long-term Bitcoin holders sold off assets worth tens of billions of dollars. So-called altcoins have significantly underperformed both Bitcoin and Ethereum. The MarketVector Digital Assets 100 Small-Cap Index, which tracks the 50 smallest digital assets by market cap among the top 100, has plunged nearly 70% over the past year. Other cryptocurrencies have consistently lagged since Bitcoin and Ethereum gained US exchange-traded product approval, attracting institutional capital. However, spot ETFs for these assets—a significant portion of which are held by retail investors—saw outflows amounting to tens of billions of dollars in November. Morten Christensen, a trader operating AirdropAlert.com, stated, "Bitcoin is still trading like a high-beta risk asset, not digital gold. This doesn't mean the thesis is dead—it just means it hasn't been realized yet."
The crypto winter may be nearing its end.
Matt Hougan, Chief Investment Officer at digital asset management firm Bitwise, believes the cryptocurrency market has been in a full-scale winter since January 2025, similar to previous bear markets in 2018 and 2022. In a report on Monday, he stated, "This is not a 'bull market correction' or a 'short-term pullback.' This is a full-blown, 2022-style crypto winter." However, Hougan suggested this bear market might be approaching its conclusion. He noted that downturns typically last around 13 months. If the bear market's start is pegged at January 2025 instead of October 2024, cryptocurrencies could potentially bottom within weeks. He wrote, "As a veteran of multiple crypto winters, I can tell you that the ends of those winters felt a lot like now: despair, desperation, and listlessness."
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