What to Know:

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The crypto market is experiencing a downturn, with Bitcoin trading at three-month lows beneath $88,000, and the CoinDesk 20 Index down over 10% within 24 hours. Factors contributing to this plunge include a risk-off sentiment in traditional markets and the influence of meme coins, notably the trading activities surrounding TRUMP and LIBRA.

As discussed previously, market makers at the Consensus Hong Kong conference expressed concern over the liquidity drain from productive sub-sectors in the crypto market caused by the memecoin craze.

Disappointment regarding President Trump’s promises has also impacted market sentiment; anticipated actions, such as a Bitcoin reserve strategy, have yet to materialize, with state-level reserves facing implementation challenges. “The industry is still waiting for tangible measures, including a Bitcoin Strategic Reserve,” stated Petr Kozyakov from Mercuryo. Meanwhile, the recent major hack that leaked 401,000 ETH from the Bybit exchange has further shaken confidence.

Economic concerns about the U.S. are diminishing demand for riskier assets. Aurelie Barthere from Nansen noted, “The growth slowdown indicated by the latest U.S. Services PMI, the lowest in 22 months, suggests GDP tracking may slow to just 0.6%.”

The current situation has led Bitcoin to drop out of its two-month range between $90,000 and $110,000, with potential for further decline to $70,000.

Looking ahead, potential stabilization might occur with an announcement from Trump regarding a strategic reserve or a rebound in the tech-heavy Nasdaq 100 index, though recent trends show a downward movement.

The next significant events to monitor include Nvidia’s earnings on February 26 and the core PCE inflation report on February 28. Stay tuned!