- Bitcoin dropped over 5% to as low as $91K while Ethereum plunged 19% to $2,159, with the sell-off triggered by renewed tariff wars under Donald Trump.
- The market crash wiped out $2.19 billion from derivative orders in 24 hours, drawing comparisons to major crashes like COVID and FTX collapse.
- Both cryptocurrencies have since recovered and are holding key support levels, with Bitcoin above $94K and Ethereum bouncing back to $2,500.
- Analysts suggest this could be an "ultimate bear trap" that may set up a massive rebound, as both assets recovered from strong technical support zones.
Date: February 3, 2025 | 06:08 AM GMT
The cryptocurrency market has faced a major sell-off in the past 24 hours, with Bitcoin (BTC) experiencing a sharp decline of over 5%, dropping as low as $91K before recovering to around $94K. Ethereum (ETH) was hit even harder, suffering a massive 19% plunge, falling to $2,159 before bouncing back to $2,500. The primary catalyst for this crash appears to be the renewed tariff wars triggered by Donald Trump, which has spooked the market.
Meanwhile, in the last hour, the market is making a slight recovery as both BTC and ETH are moving back into green territory.
This sudden drop has been so severe that it’s being compared to past market crashes, including the COVID crash and the FTX collapse, as a staggering $2.19 billion was wiped out from derivative orders in just last 24 hours day.
Bitcoin (BTC) and Ethereum (ETH) Hold Key Support Levels
Despite the plunge, both Bitcoin and Ethereum have shown resilience by holding key support levels. Bitcoin, after hitting its low of $91K, has managed to recover above of $94K and is currently testing the support at the 100-day simple moving average (SMA).
Ethereum, on the other hand, found strong support at the $2,100 level, where it bounced from a symmetrical triangle pattern. It has since recovered to $2,500, with support from its 200-day SMA.
Is This the Ultimate Bear Trap?
Some analysts are speculating that this could be a “bear trap,” which occurs when controlled selling causes a temporary drop in price, fooling traders into thinking a larger price decline is imminent. In such scenarios, the market often rebounds sharply, trapping those who shorted the market.
Given the current price action of both Bitcoin and Ethereum, which are recovering after holding strong support levels, this sharp decline could very well be the ultimate bear trap setting up for a massive rebound in the coming days or weeks.
While it’s too early to predict with certainty, the recovery from these support levels suggests that the market might be poised for a reversal rather than a continued downtrend.
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