According to recent market dynamics, the correction in the cryptocurrency market in 2025 is mainly driven by the following factors:

1. **Macroeconomic and Policy Shocks**: The Trump administration's imposition of tariffs has raised inflation expectations, coupled with the uncertainty surrounding the Federal Reserve's interest rate cuts, triggering a global sell-off of risk assets. At the same time, U.S. tech stocks were impacted by innovations in the DeepSeek algorithm, with the Nasdaq index plummeting by 4%. The cryptocurrency market, which has become more correlated with U.S. stocks (6-month rolling correlation rising to 0.5), also faced pressure, with Bitcoin briefly dropping below $100,000 and a decline of 17.39% in February.

2. **Market Leverage Cleansing and Emotional Fluctuations**: After Bitcoin reached a new high of $108,000, it quickly corrected by 15%, while altcoins generally retraced the gains from the “Trump Effect.” Over-leveraging and short-term outflows of ETF funds exacerbated the volatility. Some analysts believe this is a typical adjustment of a bull market, and historical data shows that a rebound may follow the correction.

3. **Institutional Behavior Divergence**: Despite retail investors selling off, institutions like MicroStrategy have increased their holdings during the dip, purchasing over 20,000 Bitcoins in February at an average price of $97,514, highlighting long-term confidence.

Short-term risks remain, but the integration of AI and cryptocurrency, a shift in regulation, and continued institutional entry may lay the groundwork for a rebound. It is advisable to pay attention to leverage ratios and policy trends, and to be cautious of the risks associated with highly volatile assets.