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Why Cryptocurrencies Are Falling: Analysis and Context of the Market Drop in February and March 2025
If you're wondering why cryptocurrencies are currently falling, the short answer is that several factors have combined to create a bear market . Between the global economic environment, political announcements, and the inherent volatility of the ecosystem, cryptocurrencies have experienced a significant decline in recent weeks. Below, you'll discover the origins of this drop, the reasons why it's not necessarily permanent, and how current events, sometimes amplified by certain media outlets, can influence market direction.
Table of Contents
Why are cryptocurrencies falling? A quick overview in 2025
During February and March 2025, the price of Bitcoin and many other cryptocurrencies fell significantly. This decline followed a period of euphoria triggered by Donald Trump in January 2025, when markets seemed to anticipate pro-crypto measures . Investors, seeking positive signals, were betting on the creation of a strategic reserve of Bitcoin and the approval of new ETFs (Exchange Traded Funds) on certain exchanges.
However, between the threat of a trade war , the Fed 's tight monetary policy , and the media attention surrounding events like the Bybit , the market has faced a series of turbulent events. Add to that a sense of geopolitical uncertainty and the dissemination of potentially exaggerated news by some media outlets, and you have a climate conducive to disengagement by many investors.
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The impact of major cycles: why the decline is not a first
The history of cryptocurrencies is marked by successive phases of expansion and contraction. The bull run we experienced in late 2024 and early 2025 falls within this cyclical pattern. However, these long-term trends can be disrupted by external factors, as has been the case in recent months.
A complicated macroeconomic environment
In the first quarter of 2025, increased volatility was observed in the stock markets. This instability was exacerbated by geopolitical tensions and economic uncertainties linked to inflation . Institutional investors, who had begun to take an interest in cryptocurrencies when interest rates were lower, found themselves facing a less accommodative Federal Reserve (the Fed recession in the United States and other major economic regions then led to a transfer of risky assets to assets considered more stable (bonds, gold, etc.).
These movements are not new: with each macroeconomic instability, investors generally become more cautious. The cryptocurrency market, already accustomed to fluctuations, is hit hard by these readjustments when the global economic situation worsens and selling pressure increases.
The possibility of a trade war under Trump's presidency
Among the direct causes cited, the threat of a trade war between the United States and several of its partners (China, Europe, Canada, Mexico) has resurfaced regularly since Donald Trump . The announcement of new taxes or tariffs on imports creates a climate of instability. In this context, capital often turns away from highly volatile , such as cryptocurrencies.
Initial promises of support for Bitcoin and decentralized finance ( DeFi ) have not yet translated into concrete measures. Investors, who had hoped for greater institutional adoption, have therefore experienced some disillusionment, contributing to Bitcoin's fall and the decline of many other cryptocurrencies.
Why are cryptocurrencies falling? Key events that accelerated the trend
The attack on the Bybit platform
In February 2025, the security of the Bybit , despite its reputation for robustness, was compromised, resulting in the theft of approximately $1.5 billion . This massive hack triggered panic among investors, serving as a reminder that the risk of hacks persists despite continuous advancements in cybersecurity. Concerns about the security of wallets then prompted many investors to withdraw their funds from exchanges, further exacerbating the decline in prices.
The controversy surrounding Deepseek: the influence of the media
A significant development in early 2025 concerns Deepseek , an open-source artificial intelligence competing with ChatGPT, capable of delivering comparable performance while requiring less computing power . This advancement was perceived as a threat to players reliant on heavy infrastructure, particularly Nvidia , whose stock price plummeted amid the prospect of reduced GPU demand. Heavily covered by the media starting January 27th (even though the report was released a week earlier), the announcement was misinterpreted by the markets, triggering widespread mistrust , including towards cryptocurrency investments. However, this innovation could make AI and blockchain more accessible and efficient , and could prove very positive in the long term.
This phenomenon perfectly illustrates how the dissemination of information, sometimes incomplete or poorly contextualized, can trigger a delayed decline. Investors discover the information, become concerned, and then act. When the media intensely covers a topic, they often reinforce FUD (Fear, Uncertainty, and Doubt). As a result, selling pressure increases, and some solid projects end up being unfairly undervalued.
When the media amplify the impact of a news item
It is essential to understand how media coverage can act as a catalyst for a downward trend. A simple technical event or a hack can become a harbinger of a widespread collapse. Furthermore, the influence of major media outlets can lead to negative interpretations that trigger massive sell-offs. This self-fulfilling prophecy is well-known in the world of markets: the more emphasis is placed on the decline of a sector, the more market participants distance themselves from it, thus fulfilling the initial prophecy.
Why are cryptocurrencies falling? The fundamentals of the ecosystem: why blockchain remains strong
Despite this temporary downturn, blockchain and the crypto world continue to evolve. Innovation persists, whether in smart contract , decentralized finance , or new AI- . Major companies remain interested in integrating decentralized protocols into their services, and the overall transaction volume has not experienced a significant collapse.
Although the market capitalization of cryptocurrencies has decreased, the number of projects continues to grow. Innovations related to tokens (NFTs) are evolving, while new scalability and privacy protocols are being tested. In other words, attention remains high, and the long-term outlook is not in question, even if valuation is currently subject to market forces.
The search for technical reasons: analysis of volumes and trading signals
technical analysis perspective , several indicators tipped the scales in favor of a pullback. The bullish rally that propelled Bitcoin to over $100,000 at the end of January 2025 showed overbought signs on numerous oscillators (RSI, Stochastic, etc.). Sellers were therefore waiting for the opportune moment to take their profits.
When panic sets in, it is often amplified by algorithmic trading . Algorithms, programmed to sell as soon as a certain technical threshold is crossed, create a cascade of sales. Trading volumes then surge, causing prices to plummet even faster. Individual traders, seeing prices fall, may be tempted to sell their cryptocurrencies to avoid further losses, leading to a snowball effect.
A resurgence of optimism is coming soon?
Although the current situation appears pessimistic, this pullback could pave the way for healthy consolidation. A potential bull run once the macroeconomic environment improves and US politics become less uncertain. Companies seeking to further integrate blockchain into their internal processes continue to launch new projects, and institutional adoption, while currently paused, has not stalled.
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Why are cryptocurrencies falling? Psychological factors: FUD and the influence of opinion leaders
Fear, uncertainty, and doubt (collectively known as FUD ) are key factors in a market as young as the cryptocurrency market. When an opinion leader, a major investor, or a well-known media outlet expresses negative views, it can trigger a massive sell-off. Conversely, a tweet or a statement of enthusiasm can reignite buying momentum. Since trust is the primary driver of these markets, it quickly erodes as soon as bad news, whether real or perceived, makes headlines.
Why cryptocurrencies are falling: a summary of the main reasons
To summarize, several factors have combined to explain why cryptocurrencies have been falling since February 2025:
- Macroeconomic factors : risk of recession , strict monetary policy, etc.
- Uncertainty surrounding Donald Trump : unfulfilled pro-crypto promises, threats of trade war , trade instability.
- Technical events: Bybit , controversial announcement by Deepseek, not necessarily well interpreted on the crypto market.
- The spread of FUD in the media: delayed timing, amplification of news that was not necessarily negative.
- The "cycle" effect of the crypto market: after a significant rise, a period of consolidation and pullback is common.
- There is some disenchantment regarding institutional adoption, despite the arrival of ETFs on Bitcoin and Ethereum last year.
Why are cryptocurrencies falling? Looking ahead, is a recovery imminent?
As is often the case in the cryptocurrency sector, the future depends on both exogenous factors (political, economic, geopolitical) and endogenous factors (innovation, adoption, regulation). The question is not so much whether the markets will recover, but rather when. Several factors give cause for optimism:
- The continued adoption of blockchain by businesses and governments.
- The strengthening of regulatory frameworks, which could attract more risk-averse institutional investors.
- The widespread adoption of blockchain AI and other technological innovations related to decentralized finance .
The lesson to be learned: the crypto market is resilient
Despite the turbulence and uncertainty, cryptocurrencies have already weathered more serious crises in the past. From the bursting of the ICO bubble in 2018 and the numerous regulations in China to exchange hacks over the years, the ecosystem has consistently demonstrated resilience. Bitcoin, launched in 2009, has survived various periods of panic and now boasts over fifteen years of history. This longevity reinforces the belief among some investors that the leading cryptocurrency can still rebound.
Conclusion: Stay vigilant and informed
Understanding why cryptocurrencies are falling at the start of 2025 requires considering a range of factors: political, economic, media-related, and technological. Geopolitical tensions , the threat of a trade war Fed 's stricter monetary policy Bybit hack , and the confusion surrounding Deepseek are all reasons that have affected the market. However, upon closer examination, blockchain and decentralized finance continue to progress in terms of concrete solutions and global adoption. Investors and developers remain active, even amidst the turmoil, demonstrating a fundamental confidence in the ecosystem's potential.
The recent, albeit very real, drop doesn't seem to signal the end of the crypto revolution. The market's ability to recover from previous crises demonstrates its underlying resilience. It's simply a matter of remaining cautious, educating oneself, and following an investment strategy tailored to one's risk profile. In time, if the history of Bitcoin and cryptocurrencies serves as any guide, new bull markets are likely to emerge, fueled by innovation, scarcity, and growing institutional interest. Until then, the best approach is to observe the fundamentals and avoid panicking.
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Yoann
Trained as an engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future, I am participating in its democratization by developing Crypternon.