Crypto Market Faces Extended Sell-Off
A relentless wave of sell-offs has gripped the cryptocurrency market, with Bitcoin dropping nearly 5% on Monday and Ethereum losing over 10% in just two days. As of Tuesday, major cryptocurrencies including Bitcoin, Ethereum, and prominent altcoins remain under significant pressure. Investors appear to be shifting focus away from digital assets, compounding the industry’s struggles following last week’s historic $14 billion hack.
Key Market Movements:
- Bitcoin plunged close to 5%, briefly touching the $90,000 psychological threshold.
- Ethereum extended its decline during Tuesday’s Asian trading session, erasing more than 10% of its value in 48 hours.
- Solana tumbled approximately 15%.
- Dogecoin fell around 13%.
👉 Why are crypto markets crashing?
Strategic Bitcoin Accumulation Amid Volatility
Amid the downturn, corporate buying activity continues:
- Strategy Corporation disclosed the purchase of 20,356 BTC ($1.99 billion) between February 18–23.
- Executive Chair Michael Saylor confirmed via social media: "As of February 23, 2025, we hold 499,096 BTC ($33.1 billion total) at an average cost of $66,357 per coin." This gives Strategy control over 2.3% of Bitcoin’s total circulating supply.
Market Analysis: Underlying Weakness
Jeff Dorman, CIO at Arca, observes:
"Crypto weakness persists for an eighth consecutive week—unlike equities, bonds, or gold which show no comparable stress signals. This reflects depressed sentiment, meme coin failures, and dwindling capital for new token launches."
Arca’s research reveals most tokens have shed 30–80% of their value since mid-December, with few exceptions.
Solana’s Perfect Storm
The blockchain faces multiple headwinds:
- $500 billion market cap evaporation in one month
- Political controversy involving Argentine President Javier Milei and the failed Libra meme coin
- 1.72 billion SOL ($17.2 billion) scheduled for "unlock" on March 1, potentially flooding markets with sell pressure
Edward Chin of Parataxis Capital notes:
"Unlocks trigger supply dumps while capital concentrates in Bitcoin. Altcoins lack compelling narratives, suggesting further deterioration until catalysts emerge."
Exchange Fallout and Stock Correlations
Bybit’s promised $1.4 billion reimbursement for hack victims failed to stabilize Ethereum:
- The exchange borrowed and bought ETH to cover losses (per CEO Ben Zhou’s X post)
Publicly traded crypto firms mirrored the decline:
- Coinbase: 6-day losing streak
- MicroStrategy: -5.7% Monday; YTD gains erased
- MARA Holdings: -5.3% Monday; -13% weekly
👉 How to protect your crypto portfolio?
FAQs: Understanding the Crypto Crash
Q: What’s driving the current crypto downturn?
A: Converging factors include post-hack trauma, token unlock sell pressure, and capital migration from altcoins to Bitcoin.
Q: Should investors expect further declines?
A: Market cycles suggest volatility may persist until new capital inflows or positive narratives emerge.
Q: How are institutions responding?
A: Firms like Strategy continue strategic accumulation, viewing dips as buying opportunities despite short-term weakness.
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