Why is crypto market down today? (Feb. 23)

The global crypto market tanked 4.5% to $2.29 trillion on Monday amid Trump’s latest round of global tariffs and concerns over geopolitical tensions.

According to data from crypto.news, Bitcoin (BTC), the bellwether crypto asset, fell roughly 5% from around $68,000 to an intraday low of $64,435, losing the $65,000 psychological support level. 

The second largest crypto asset by market cap, Ethereum (ETH), fell 5.8% to under $1,900 while other major cryptocurrencies such as XRP (XRP), BNB (BNB), Dogecoin (DOGE), and Bitcoin Cash (BCH) posted losses ranging between 5% and 6% while Solana (SOL) dipped 9% to $77 at press time. 

Bitcoin’s latest downturn triggered a wave of liquidations, most of which came from bullish bets in the leveraged markets. 

CoinGlass data show that over $464 million in positions were wiped out in the past 24 hours, with the majority coming from long positions.

The total open interest of the market had also fallen 1.3%, suggesting that traders are unwinding their positions amid fears of a deeper market correction

Meanwhile, the Crypto Fear and Greed index, which measures the market sentiment, has sunk deeper into extreme fear levels after dropping 4 points over the past day to 5. This sentiment had persisted for the better part of February. 

The crypto market tanked as investors remain anxious over the uncertainty of trade policy around President Donald Trump’s tariffs.

While the U.S. Supreme Court recently ruled against parts of the administration’s emergency tariff program, Trump responded by re-imposing a 10% tariff shortly after and eventually raising it to 15% after rerouting the policy under Section 122. 

Investors fear such tariffs could massively hamper global economic growth and could lead to a resurgent inflationary spiral. Recall that last year, during Trump’s 145% tariff threats on China, the crypto market tanked by nearly 10% on a single day and suffered double-digit losses over the subsequent months. 

Fears of US-Iran war

Another major catalyst that led to today’s downturn is the threat of an armed conflict between the U.S. and Iran as the former continues to build its military presence in the Persian Gulf. Such a confrontation could trigger a potential war between the two nations that could subsequently spread to the broader Middle East, impacting global trade flows. 

In a Truth Social post on Thursday, Trump signalled that he would decide in the next 10 days whether to launch an aerial attack on Iran. With Bitcoin having failed to maintain its status as a safe-haven asset since the beginning of this year amid market chaos, investors are likely rotating to traditional hedges such as gold as they await more clarity. 

Market divergence from tech stocks

Another major factor that seems to have shaken retail confidence is the crypto market’s divergence from the tech stocks. At press time, several Asian indexes, such as the Nikkei 225, Hang Seng and KOSPI, rose in early trade, while Bitcoin and major crypto assets have suffered sharp drops. 

With the crypto market breaking away from the tech equities, which have often been a primary driver for the crypto market, investors fear that the digital gold narrative has weakened as Bitcoin has increasingly behaved as a high-risk speculative asset this cycle.