Bitcoin under pressure amid market correction

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State of crypto

• Crypto faces "reality check" as momentum fades
• Bitcoin and Ethereum hit three-month lows in market resets
• US tariffs and economic uncertainty weigh on crypto confidence
• Altcoins take a hit, with XRP, Solana, and Cardano seeing double-digit declines
• Institutional investors eye the Federal Reserve’s next move on rate cuts

Check prices on the BTC Markets exchange

Crypto faces "reality check" as momentum fades

Bitcoin has now entered a technical bear market after months of pro-crypto optimism, going down over 21% from its all-time high of nearly US$109k. According to Charlie Sherry, Head of Finance at BTC Markets, excessive leverage, macroeconomic uncertainty, and industry setbacks created the perfect storm for a sharp sell-off.

Over US$1.56 billion in liquidations hit the crypto market during the drop down to US$85k on Wednesday, almost reaching the tally of liquidations due to Trump's tariffs earlier this month. Despite the downturn, Sherry notes that some altcoins may have already capitulated earlier in the year.

Meanwhile, investors are closely watching macro catalysts like upcoming U.S. unemployment data and trade tariff decisions, as these could determine whether crypto finds a true bottom or faces further downside.

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Bitcoin and Ethereum hit three-month lows as market resets

Bitcoin and Ethereum have plunged to their lowest levels in three months, with Bitcoin falling below US$84,000 and Ethereum trading under US$2,300. This pullback follows a period of relative stability and is attributed to several factors, including macro uncertainties. The S&P 500 also extended its losing streak to four days, as traders reacted to economic growth concerns and global trade uncertainty, adding further pressure to risk assets like cryptocurrencies.

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US tariffs and economic uncertainty weigh on crypto confidence

The recent announcement of 25% tariffs on imports from Canada and Mexico by US President Donald Trump has intensified the economic uncertainty that's already clouding overall crypto market sentiment. The Crypto Fear & Greed Index plummeted to 21, indicating "Extreme Fear," as investors grapple with potential trade wars and their impact on global markets moving forward. This shows heightened apprehension that has likely contributed to the significant selloffsof major cryptocurrencies like Bitcoin and Ethereum, as traders reassess risk exposure in the current state of the global markets.

Check XRP

Altcoins take a bigger hit, with XRP, Solana, and Cardano seeing double-digit declines

Altcoins have experienced significant losses in the recent market downturn. XRP has declined by 18%, Solana (SOL) by 22%, and Cardano (ADA) by 17%. These sharp declines can be attributed to a combination of factors.

According to Arca’s Chief Investment Officer Jeff Dorman, crypto has shown altcoin weakness even before this recent pullback - as equities, fixed income, and gold remain stable - pointing to a lack of capital and poor sentiment driven by failed memecoins and the absence of new inflows. It’s also worth noting that Solana faces increased sell pressure ahead of a US$1.72 billion token unlock on March 1, with investors likely offloading holdings. 

Parataxis co-founder Edward Chin notes that most traders are already heavily invested in altcoins, while new capital is flowing into Bitcoin, strengthening BTC dominance and leaving altcoins struggling without a strong narrative.

Check SOL

Institutional investors eye the Federal Reserve’s next move on rate cuts

The US Federal Reserve is expected to resume rate cuts in June 2025, with traders now pricing in a 70% chance of a quarter-point reduction, followed by another possible cut in September 2025. Consumer confidence saw its sharpest drop in more than three years, driven by concerns over Trump's tariffs, tax cuts, and federal workforce reductions in the US. Meanwhile, inflation expectations surged to 6%, the highest since May 2023. Fed officials currently remain cautious, seeking more evidence that inflation is cooling before committing to easing monetary policy.

Check ADA

Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

AFR: Investors take profits on two of last year’s hottest trades

“This correction doesn’t necessarily mark the end of the bull market, but it is a reality check,” said Charlie Sherry, head of finance at Australian crypto exchange BTC Markets, speaking on bitcoin.

Read the full article here.

The Australian: ASX slides again; Fortescue down 4pc on Trump’s copper tariff threat

“Hopes for a pro-crypto Trump administration fuelled Bitcoin’s rally to all-time highs, but with no concrete policy follow-through, momentum faded,” said Charlie Sherry at BTC Markets.

Read the full article here.

News.com.au: ‘A reality check’: Bitcoin slides 21 per cent below its peak

Charlie Sherry, Head of Finance at BTC Markets, says the dip is “a reality check” for those who have jumped on the crypto train after massive successes in the market.

“If buyers step in, we could be seeing the bottom, or at least a temporary relief bounce,” he said. “If not, we risk further downside.”

Read the full article here.

The Block: US spot bitcoin ETFs see record outflows worth $1 billion

"One key factor appears to be profit-taking after bitcoin’s strong performance in 2024," said BTC Markets Crypto Analyst Rachael Lucas." After a rally of that magnitude, it’s natural to see investors lock in gains, especially as the new year has started with softer momentum."

Read the full article here.

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The week ahead: economic events

Thursday February 27th 

• 1:30pm US Durable Goods Orders and GDP Growth Rate

Friday, February 28th 

• 7:00am Turkey GDP Annual Growth Rate
• 7:45am France Inflation Rate
• 10:00am Italy Inflation Rate
• 12:00pm Brazil and India GDP Annual Growth Rate
• 1:00pm Germany Inflation Rate
• 1:30pm Canada GDP Growth Rate QoQ and Annualized
• 1:30pm US Core PCE Price Index MoM, Personal Income MoM, and Personal Spending MoM

Saturday, March 1st 

• 1:30am China NBS Manufacturing PMI

Monday, March 3rd 

• 1:45am China Caixin Manufacturing PMI
• 10:00am Euro Area Inflation Rate
• 11:00am Italy Full Year GDP Growth and Government Budget

Tuesday, March 4th 

• 1:00am US ISM Manufacturing PMI
• 12:30am Australia Interest Rate
• 5:00am Japan Consumer Confidence

Wednesday, March 5th 

• 12:30am Australia GDP Growth Rate

Source: Trading economics

Market reflections

Overview

Australia's economy faces challenges amid global trade tensions and domestic policy decisions. The Reserve Bank of Australia (RBA) downplays the impact of recent US tariffs, while the government seeks exemptions to protect key industries. Monetary policy remains cautious, with the RBA requiring more positive inflation data before considering further rate cuts. Globally, significant fiscal policy shifts in the US and a decline in consumer confidence contribute to an uncertain economic environment, influencing investor sentiment across traditional and digital asset markets.

Australia

• RBA downplays US tariff impact on Australia
• Australian treasurer pushes for tariff exemption in Washington
• RBA signals no immediate rate cuts without more inflation
• Australian dollar awaits key inflation data

Tariff uncertainty, inflation risks, and monetary policy: What it means for crypto

Australia's economy is not immune to shifting global trade policies, inflation concerns, and cautious central bank decisions. The Reserve Bank of Australia (RBA) has so far downplayed the potential impact of Trump's 25% tariffs on steel and aluminum, stating that Australia is less vulnerable than other economies. However, the government is actively working to secure an exemption from the tariffs, with Treasurer Jim Chalmers currently in Washington to meet with the US Treasury Secretary Scott Bessent. If an exemption isn’t granted, Australia’s export sector could see ripple effects in metals and manufacturing, though the RBA remains optimistic about the country’s resilience.

At the same time, monetary policy remains a key focus for Australia's economy. Earlier this month, the RBA cut interest rates for the first time in over four years, but policymakers have signaled that further easing is far from guaranteed. Deputy Governor Andrew Hauser emphasized that the central bank needs to see more concrete progress on inflation before reducing rates further. Markets are closely watching this upcoming CPI report, as it will heavily influence the RBA’s next steps. Meanwhile, the Australian dollar has remained steady despite two consecutive losing sessions, as global uncertainty continues to weigh on investor sentiment.

What this means for crypto

The combination of rising global uncertainty, ongoing trade tensions, and central bank policy changes is creating a highly volatile environment for crypto markets. Investors are increasingly risk-averse, and as equities and commodities experience turbulence, crypto has followed suit. With that said, the US Federal Reserve is expected to cut rates later this year, and market liquidity could improve, potentially leading to a tailwind for risk assets like cryptocurrencies. Present regulatory developments, like the US SEC's recent decisions on its crypto-related investigations, could support long-term sentiment in the digital asset space. For now, current macro trends and global economic data will continue to drive market movements in the short term, making the coming weeks crucial for crypto investors.

Global

• US house approves tax cut plan amid spending reductions
• Consumer confidence drops to eight-month low in the US
• Japan's inflation accelerates, supporting potential rate hikes
• Canada seeks new oil pipelines amid trade tensions

United States

US House approves tax cuts as consumer confidence hits 8-month low

The US House of Representatives has approved a US$4.5 trillion tax cut plan alongside US$2 trillion in spending reductions. While supporters argue these tax cuts will stimulate economic growth, critics warn that deep reductions in social programs like healthcare, education, and food assistance could widen economic inequality and strain government resources. The proposed budget now faces significant debate in the Senate, with concerns over its potential long-term impact on the national debt.

Meanwhile, US consumer confidence has plunged to its lowest level in eight months, showing growing uncertainty over trade policies, new tariffs, and the broader economic outlook. The Consumer Confidence Index recorded a sharp decline, with households increasingly cautious about spending. According to economists, this dip in sentiment could slow consumer-driven economic growth, which has been a key driver of stability. It adds to the already uncertain financial landscape, with markets closely watching upcoming economic data and Federal Reserve policy decisions to figure out what’s next.

Sources: AP News, Reuters

Japan

Japan's inflation accelerates, supporting potential rate hikes

Japan's inflation rate has accelerated to 4%, up from 3.6% in the previous month, marking the first time in two years it has reached that level. The increase is said to be primarily driven by rising import costs and sustained wage growth, which contribute to higher consumer prices. The Bank of Japan (BOJ) already lifted its short-term rate to 0.5% in January, and policymakers have signaled that further hikes are on the table if inflation remains above the 2% target. With consumer prices staying elevated and the state of Japan's economy, analysts believe the BOJ is on track for another rate hike this year, making it one of the few major central banks tightening monetary policy amid global uncertainty.

Source: Bloomberg

Canada

Canada sees new oil pipelines amid trade tensions

Canada is seeking to reduce its reliance on the US market for oil exports amid threats of tariffs from US President Donald Trump. Despite political support for new pipelines to coastal export terminals, no private companies have shown interest due to financial, regulatory, and environmental challenges, as well as opposition from activists. The Canadian government itself may need to play a more significant role in overcoming these hurdles to diversify its oil export markets.

Source: Reuters

Regulation roundup

SEC drops Uniswap investigation amid regulatory shift

The US Securities and Exchange Commission (SEC) has concluded its investigation into Uniswap Labs without pursuing enforcement action. Initially, the SEC issued a Wells Notice to Uniswap Labs, alleging it operated as an unregistered broker, exchange, and clearing agency, while also offering unregistered securities. The case was seen as a key legal showdown for DeFi, with potential implications for the broader decentralised finance industry. The decision to drop the investigation now reflects a broader regulatory shift under the current administration, aiming to foster innovation in the crypto industry

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