Bitcoin Crashes Below $70K as Trump Rally Fades

$70,000. For months, this was Bitcoin's fortress—a psychological barrier that bulls defended fiercely. On February 5th, that fortress crumbled.

Bitcoin crashed more than 8% in a single day, tumbling to $68,000 and wiping out what many called the "Trump rally." The world's largest cryptocurrency has now surrendered nearly all gains since hitting $107,000 in the euphoric weeks following Donald Trump's election victory.

The End of Political Euphoria

The post-election surge felt unstoppable. Trump's pro-crypto campaign promises and hints at regulatory relief had investors betting big on digital assets. Bitcoin soared 60% in just three months after the election, with institutional money pouring in through newly approved ETFs.

But promises aren't policies. As weeks turned into months without concrete regulatory changes or crypto-friendly legislation, the market's patience wore thin. The Federal Reserve's signals about slowing interest rate cuts added another layer of pressure, making risk assets like crypto less attractive.

Warning Signs Were Flashing Red

This wasn't just a random selloff—multiple indicators had been signaling trouble. Institutional appetite was cooling fast. BlackRock and Fidelity's Bitcoin ETFs saw three consecutive weeks of outflows, a stark reversal from their launch momentum.

Retail investors were equally jittery. Daily trading volumes on Coinbase dropped 40% from the previous month. Perhaps most telling, money was fleeing to stablecoins like Tether—a classic sign that traders want to stay in crypto but avoid volatility.

The options market told a similar story. Put-call ratios had been climbing for weeks, suggesting sophisticated investors were hedging against exactly this kind of crash.

Beyond Bitcoin: Broader Crypto Carnage

The selloff wasn't limited to Bitcoin. Ethereum fell 10%, while smaller altcoins saw even steeper declines. Solana dropped 15%, and meme coins like Dogecoin were down over 20%.

This broad-based selling suggests the problem isn't specific to any one cryptocurrency but rather a fundamental reassessment of the entire sector. When institutional money moves this fast, it's rarely about technical analysis—it's about risk management.

What This Means for Your Portfolio

For investors who bought into the Trump rally, this crash is a harsh reminder that political narratives don't always translate into sustained market gains. Those who entered positions above $90,000 are now sitting on significant losses.

But seasoned crypto veterans might see opportunity in the chaos. Historical patterns show that Bitcoin's most dramatic crashes often precede its most spectacular rallies. The question is whether this correction will find support around current levels or continue deeper.