The collapse of Bitcoin is generating a lot of fear among crypto investors

The prezzo di Bitcoin negli ultimi sette giorni sta facendo registrare un crollo del 19%. 

This is generating a lot of fear in the crypto markets, but it might be partially unjustified fear. 

In fact, it is not at all an epochal collapse, nor is it even questioning the long-term cycle yet. 

The crash of the Bitcoin (BTC) price

Before Donald Trump’s electoral victory, the price of Bitcoin (BTC) fluctuated around or just below $70,000.

This value is a perfect benchmark, not only because it is in line with the average price of 2024, but also because it is currently the median price between the bull and bear possible highs and lows in this specific period. 

With Trump’s victory at the beginning of November, the price of BTC over the course of two weeks had risen to about $100,000, then reached a peak of over $108,000 just over a month after the elections. 

All this was specifically due to the so-called “Trump trade“, that is, the reaction of the markets to Donald Trump’s victory.

Until his inauguration at the White House, which took place on January 20, everything seemed to be going smoothly, but a few days later a bear phase began that is still ongoing. 

In particular, on February 3rd, the price had fallen below $93,000, and although on the same day it managed to climb back above $100,000, that turned out to be a bull-trap. 

The problem is that Trump’s foreign policy, and in particular the trade war he is conducting against Canada, Mexico, China, and the European Union, is spreading a lot of fear in the markets.

Due to these fears, after a few weeks of lateralization above $94,000, on Monday the price of Bitcoin broke below this threshold, and in just four days it plummeted below $80,000.

The fears about the Bitcoin crash

There are two external indicators that highlight these fears in traditional markets. 

The first is the gold price, which rose during 2025 from just over $2,600 an ounce to almost $3,000. Such strong and rapid rises in the gold price are unusual, and since it reached all-time highs last week, it seems evident that the markets are fearing the future consequences of what is happening now. 

Something similar is also happening to the S&P500 index, the main index of the US stock exchanges. To be honest, however, it rose until last Wednesday, in this case also marking new all-time highs, but since then it has lost almost 5%.

However, both the price of Bitcoin and the S&P500 index have not yet returned to the levels prior to the electoral victory of Trump.

The price of gold, however, despite a small drop in recent days, remains still decidedly very high. 

Fear in the crypto markets

The scenario changes if one focuses only on the crypto market and extends the analysis to altcoins as well. 

In fact, the dominance of Bitcoin in recent days has risen to over 62%, which is the highest level since March 2021. 

The Fear and Greed Index of CMC has dropped to around 20 points, which is in the extreme fear zone. It hasn’t dropped this low since 2022.

Furthermore, the altseason index, also from CMC, certifies that at this moment the crypto markets are in the midst of Bitcoin season, with altcoins in significant distress.

It must be remembered, however, that fear is just an emotion, and as such, it can come and go very quickly. The fact that today it is at 20 does not necessarily mean it will be the same tomorrow. 

To this, the CMC index must be added, which is calculated specifically only on the crypto markets, taking primarily into consideration the behavior of retail investors and speculators, who are not the ones making the market. 

Given that up to $70,000 the price of Bitcoin would not enter negative territory compared to the average price of 2024, it is possible to think that the current level of fear in the crypto markets is excessive, and perhaps due to an excess of short-term expectations. 

The forecasts on the price of Bitcoin (BTC)

According to several analysts, the decline could end just below 70,000$. 

The problem, however, is that it might take time before a return to the bull-market. Although a drop below $70,000 could also be followed by a rebound, it might take months before $90,000 is surpassed again. 

Moreover, even on traditional exchanges, where the real whales operate, for some weeks now almost every day there have been outflows from crypto ETFs, so much so that on Tuesday a daily record was set with more than 1.1 billion dollars exiting from Bitcoin ETFs. 

As long as the whales do not start buying BTC again, it is very difficult to imagine a return to a bull-market.

On the other hand, it is true that many retail investors are organizing to “buy the dip,” but it is absolutely not enough to reverse the trend. 

On the contrary, the retail investors who are speculating on the price of BTC by purchasing at current prices in the hope of reselling soon at higher prices might have also made a big mistake, given that for a significant rise, purchases by whales would be necessary, of which there is currently no sign.