Bitcoin suffered a dramatic selloff on February 25, 2025, plunging below the psychologically critical $90,000 level for the first time in nearly three months as a combination of macroeconomic headwinds, a historic exchange hack, and cascading liquidations created a perfect storm for the world’s largest cryptocurrency.
The flagship digital asset dropped as low as $88,643 during the session, marking its weakest level since November 2024. The 5% intraday decline erased billions from Bitcoin’s market capitalization and dragged the broader crypto market into a deep correction that saw total market cap shed roughly 9% in a single day.
TL;DR
- Bitcoin fell below $90,000 to $88,643, its lowest level since November 2024
- Bybit exchange suffered a $1.4 billion hack involving ETH and stETH stolen from hot wallets
- President Trump confirmed tariffs on Canadian and Mexican imports, fueling inflation fears
- Over $686 million in leveraged crypto positions were liquidated in 24 hours
- Ethereum plunged 11% to $2,494, while Solana tumbled 10% to $140
Bybit Hack Sends Shockwaves Through Market
The cryptocurrency market was already on edge when news broke that Bybit, one of the world’s largest crypto exchanges, had suffered a catastrophic security breach. Hackers drained more than $1.4 billion worth of Ethereum (ETH) and staked Ethereum (stETH) from the exchange’s hot wallet on February 21, in what blockchain research firm Elliptic described as one of the largest digital heists to date.
The attack reignited painful memories of the FTX collapse in 2022 and raised fresh questions about the security of centralized exchanges. Bybit CEO Ben Zhou publicly addressed the incident, assuring users that the exchange remained solvent and that all client funds would be covered. However, the damage to market sentiment was already done, with investors rushing to move assets off exchanges in a wave of self-custody that further amplified selling pressure.
Tariff Uncertainty Adds Fuel to the Fire
Compounding the crypto-specific headwinds, U.S. President Donald Trump confirmed that planned tariffs on Canadian and Mexican imports would move forward as scheduled, reigniting fears about inflationary pressures and their potential impact on economic growth. The announcement sent ripples through traditional financial markets as well, with the Nasdaq Composite dropping over 1% and the S&P 500 falling for a third consecutive session.
Bitcoin has become increasingly correlated with high-growth technology stocks as institutional investors integrate digital assets into multi-asset portfolios. When tech stocks sell off, Bitcoin tends to follow, and February 25 was no exception. U.S. Treasury yields edged lower as investors reassessed inflation expectations, but uncertainty over monetary policy and geopolitical developments kept risk appetite firmly suppressed.
Cascading Liquidations Magnify the Damage
The sell-off triggered a massive wave of forced liquidations across the crypto derivatives market. According to data from Coinglass, more than $686 million in leveraged crypto positions were wiped out in just 24 hours. Bitcoin accounted for the largest share of these liquidations at $704 million in total open interest erased, followed by Ethereum at $270 million and Solana at $91 million.
These forced sales created a vicious feedback loop: as leveraged positions were liquidated, the resulting selling pressure drove prices even lower, which in turn triggered additional liquidations. Market makers and algorithmic trading systems exacerbated the volatility, creating flash crashes across multiple trading pairs on major exchanges.
Tech Sector Weakness Weighs on Risk Assets
The cryptocurrency selloff coincided with broader weakness in the technology sector, particularly as investors braced for earnings from chipmaker Nvidia. Concerns over artificial intelligence demand sustainability added another layer of uncertainty to markets that were already grappling with trade policy and geopolitical risks.
BRN analyst Valentin Fournier noted that despite the turmoil, Bitcoin’s relative resilience compared to altcoins highlighted its maturing role as a distinct asset class. “The delays in Bitcoin reserve adoption present a long-term opportunity — accumulation ahead of eventual acceptance,” Fournier said, maintaining a bullish medium-term outlook despite the near-term turbulence.
Why This Matters
The February 25 crash demonstrates how interconnected cryptocurrency markets have become with traditional finance. Bitcoin no longer trades in isolation — it responds to tariff announcements, tech earnings, and macroeconomic data just as equities do. The Bybit hack serves as a stark reminder that while the industry has matured significantly since the FTX era, exchange security remains an unresolved vulnerability that can wipe out billions in market value overnight. For investors, the event underscores the importance of understanding both crypto-specific risks and broader macro forces when navigating digital asset markets.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, including the potential loss of principal. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.
1.4 billion from hot wallets and Ben Zhou goes on Twitter saying everything is fine. heard that one before
The 686M in liquidations in a single day tells you everything about how overleveraged this market was. People never learn.
tomasz thats the thing, they do learn. and then they forget 6 months later and leverage up again lol
btc dropped to 88k and people acted like it was the end. we were at 16k two years ago, some perspective please