Bitcoin (BTC) price has faced a notable drop as risk-off sentiment has taken hold

Bitcoin price has faced a notable drop as risk-off sentiment has taken hold in the global markets, leading to a substantial selloff in risk assets.

Bitcoin price slid further on Wednesday as risk-off sentiment pushed up traders’ selloffs on major risk assets, with the world’s no.1 cryptocurrency token dipping below $88,000.

Bitcoin dropped more than 8 percent for a second day of steep losses, to as low as $88,164 during Wednesday’s session. This took the token to its lowest level since November 15, with the token last changing hands at 88,843 at the time of press.

Bitcoin price is now down nearly 20 percent from its peak following Trump’s inauguration on January 20. Meanwhile, other major cryptocurrencies, including Ethereum, Cardano and Solana, fell more than 10 percent in the same period.

Crypto prices slide further amid broader risk-off mood

Cryptocurrencies were on the mend after a sharp downturn that was largely seen as being driven by worsening U.S. economic data.

Trump’s escalating tariff threats and a series of political developments also heightened uncertainties in the financial markets. In addition, a major cryptocurrency hack targeted at Dubai-based exchange Bybit.

The world’s no.1 cryptocurrency token slid further on Wednesday as risk-off sentiment pushed up traders’ selloffs on major risk assets.

Bitcoin dropped more than 8 percent for a second day of steep losses, to as low as $88,164 during Wednesday’s session. This took the token to its lowest level since November 15, with the token last changing hands at 88,843 at the time of press.

Bitcoin price is now down nearly 20 percent from its peak following Trump’s inauguration on January 20.

Meanwhile, other major cryptocurrencies, including Ethereum, Cardano and Solana, fell more than 10 percent in the same period.

Crypto prices seen seeking fresh catalyst for enthusiasm

The crypto market is now seen waiting for fresh catalysts to spark more interest in digital assets.

The U.S. technology sector, which usually trades closely with crypto, also came under pressure on Wall Street. Tesla’s shares slid more than 8 percent after reports that the firm’s car sales in Europe were nearly halved last month, impacting the broader sector.

Attention will also be on Nvidia’s upcoming earnings report.

Recent U.S. economic data showed that consumer confidence dropped to its most significant decline since August 2021.

The steeper-than-expected drop in confidence signaled a weakened economic outlook amid Trump’s series of tariff announcements, largely affecting the U.S.’s two largest trading partners, Mexico and Canada.

Signs of a return in inflation, alongside the Fed’s hawkish stance, also contributed to the souring sentiment.

Global markets seen in risk-off mode

The risk-off attitude was evident across all major asset classes on Tuesday, with equities trading lower, oil prices slipping, gold pulling back and the U.S. dollar coming under pressure.

Government bond yields came down sharply, with the U.S. 10-year Treasury yield sliding to its lowest point since mid-December last year.

Gov bonds are typically seen as safe-haven assets, and their yields move inversely to bond prices.

The sell-off in equities saw the Nasdaq 100 index slide to its worst four-day drop since September.

This occurred as a series of disappointing economic reports and pessimistic outlooks from major companies, like Nvidia and Peloton, soured investor sentiment.

But, with a bulk of the recent bad news priced into the market and good news expected in the coming days, investors started rotating out of bonds and back into equities.

The selloff in 10-year Treasury yields, which reached a five-session low, also pushed up traders to prefer stocks over bonds.

ETFs investors step back from crypto

Investors in exchange-traded funds (ETFs), who previously drove the post-election surge in cryptocurrencies, pulled back.

The iShares Bitcoin Trust ETF (ticker IBIT), the largest spot bitcoin fund, saw a record-breaking outflow of $158 million on Monday.

The Fidelity Wise Origin Bitcoin Fund, the third-largest ETF withdrawal, saw nearly $250 million in outflows.

In total, over $956 million was pulled from U.S.-listed spot bitcoin ETFs in February, making it the worst month on record for the category, according to Bloomberg Intelligence data.

The bullish positions on cryptocurrencies were also massively liquidated over the past two days, to the tune of $815.8 million and $860 million, according to Coinglass.

Perpetual futures, which are more preferred by offshore investors due to their limited availability in the U.S. market, saw a decrease in leveraged long positions.

Crypto industry setbacks sour sentiment

Overall sentiment was also dampened by recent setbacks in