Market Crash Overview
Monday, February 3rd witnessed a historic collapse in Bitcoin's price, briefly dipping below $91,290. The cryptocurrency market saw:
- 700,000 traders liquidated across exchanges
- Total liquidations exceeding $2.1 billion in 24 hours
- Largest single liquidation: $25.6 million ETH/BTC position on Binance
Key Market Movements
Major Crypto Declines (24-hour period):
| Cryptocurrency | Price Drop |
|---|---|
| Bitcoin (BTC) | ~16% |
| Ethereum (ETH) | 25% |
| CoinDesk 20 Index | 19% |
Trump Family Portfolio Impact
World Liberty Financial (WLFI) holdings suffered significant losses:
- Total loss: $51.7 million (-21%)
Worst performers:
- ENA token: -44%
- Ethereum: -$36.7 million
- WBTC: -$8 million
- TRX: -$1.5 million
Market Triggers
President Trump's new tariff policies catalyzed the selloff:
- 25% tariffs on Mexican/Canadian imports
- 10% tariffs on Chinese goods
- Policy effective February 4th
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Technical Analysis
Key Support/Resistance Levels:
- Critical support: $90,000
- Next resistance: $95,195
- Breakdown target: $87,055 if support fails
Economies.com notes: "Bitcoin's sharp drop below $95,195 suggests return to bearish correction trajectory, with potential test of $87,055 if resistance holds."
Historical Context
The crash surpassed March 12, 2020's "Black Thursday" event when:
- 100,000+ traders were liquidated
- Total liquidations reached $2.93 billion
- BTC price dropped ~50% in 24 hours
Market Sentiment
Jim Bianco of Bianco Research observes: "Bitcoin reacted as a leveraged speculative asset - essentially acting as 2-3x QQQ during this risk-off move."
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FAQ Section
Q: Why did Bitcoin crash so severely?
A: The combination of new US tariffs creating inflation concerns and Bitcoin's position as a high-beta risk asset triggered the selloff.
Q: How does this compare to past crashes?
A: This liquidation event affected 7x more traders than 2020's Black Thursday, though total dollar volume remains lower due to higher market capitalization.
Q: What's the outlook for Bitcoin?
A: Short-term bearish below $95,195 resistance, but historical patterns show 30%+ corrections are common during bull markets. Neutral trend predicted near-term.
Q: Which assets were hit hardest?
A: Trump-linked WLFI portfolio suffered 21% losses, with Ethereum positions (-24.4%) and ENA token (-44%) experiencing the steepest declines.
Key Takeaways
- Bitcoin's drop below $91K marks a 16% correction from January's ATH
- Tariff policies triggered broader risk asset selloff
- Technical indicators suggest $87-90K as next support zone
- Market remains volatile but resilient with institutional interest intact
Disclaimer: CFD trading carries high risk. Seek independent financial advice before investing.