Bitcoin Investors Brace for Declines

Bitcoin investors are gearing up for further declines as the recent slump in BTC price has triggered heightened hedging activity, according to analysts.

As the so-called “Trump coup” dissipates in financial markets, Bitcoin options data indicates that investors are positioning themselves against a potential drop to $70,000, a level last seen shortly after the U.S. election.

Bitcoin has plummeted nearly 20% from its all-time high since Donald Trump took office in January. Trump’s confrontational approach to global allies and rivals has exacerbated the decline, causing investor anxiety. Furthermore, worries about persistently high inflation have negatively impacted market sentiment. The cryptocurrency sector also faced a significant setback last week when the Bybit exchange experienced a historic hack.

> “Tariff policies are further deteriorating the outlook, and stubbornly high near-term inflation expectations are adding to the overall caution,” said Chris Newhouse, research director at Cumberland Labs. “The Bybit exchange hack has added additional downward pressure on the price and weighed on sentiment.”

The four-day decline of nearly 13% marks the largest drop since August.

> “Ethereum, in particular, has felt the brunt of the Bybit incident, driving up volatility,” Newhouse remarked. “Solana itself is losing gains realized over the last few months, exacerbated by the pause in the memecoin craze.”

As investors navigate an increasingly cautious environment, many are opting to wait and exit cryptocurrencies amid market uncertainty.

> “The crypto market is still searching for a new catalyst to reverse the downtrend,” stated Ravi Doshi, co-head of markets at crypto brokerage FalconX.

This is not investment advice.