On February 24, 2025, Bitcoin experienced a sudden plunge, with the price falling below $92,000 at one point, a drop of more than 4% in 24 hours, and Ethereum falling by nearly 10%, with more than 290,000 people liquidated. This plunge was caused by the resonance of multiple factors, as follows:
1. The failure of favorable policies triggered panic selling
South Dakota originally planned to pass HB 1202, which would allow state public funds to invest up to 10% in Bitcoin, but the bill was postponed to the "41st day" (the actual session was only 40 days) due to insufficient legislative session, which essentially aborted the bill. The failure of this policy expectation directly hit market confidence, and investors were worried that stricter crypto regulations in other regions would lead to a short-term liquidity dry-up of Bitcoin.
2. The sharp decline of US tech stocks and Chinese concept stocks has dragged down market sentiment.
On the same day, the US tech sector saw a full pullback, with the Nasdaq down 1.21%, and stocks of giants like Tesla and NVIDIA falling over 2%. Chinese concept stocks suffered a heavy blow, with the Golden Dragon Index falling over 5%, and popular stocks like Alibaba and Bilibili dropping by 10%, exacerbating the panic sell-off in the crypto market due to the interconnected effects of risk assets.
3. Technical breakdown triggered leveraged liquidation.
After Bitcoin fell below the key support level of $90,000, the short-term moving average crossed below the long-term moving average, forming a 'death cross'. The 200-day moving average (approximately $84,773) is facing a test. The deterioration of the technical situation triggered stop-loss orders on long positions; according to Coinglass statistics, over $850 million in liquidation occurred in the crypto market within 24 hours, with 310,000 people becoming 'victims'.
4. Increasing regulatory and security risks heighten uncertainty.
Recently, Bybit exchange lost over $1.5 billion in ETH due to a hacker attack, exposing the security vulnerabilities of centralized platforms, leading to a sharp decline in investor trust in leveraged trading. At the same time, the SEC's scrutiny of altcoins has tightened (such as the Ripple lawsuit), further suppressing market speculation sentiment.
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Market outlook: short-term fluctuations forming a bottom, long-term trends still show divergence.
From a technical perspective, if Bitcoin holds the 200-day moving average support at $85,000, it may welcome a rebound opportunity; however, if it fails to hold, it could drop to $80,000. On the macro level, expectations of Fed interest rate hikes and Trump's tariff policies remain potential risk points. Investors are advised to remain rational, avoid blindly chasing gains and losses, and pay attention to on-chain capital flows and policy dynamics.
(This analysis is based on market data and industry dynamics and does not constitute investment advice.)
