The cryptocurrency market was rocked by a sharp downturn on February 25, 2025, as Bitcoin plunged below the $91,000 mark, triggering widespread sell-offs across major digital assets. At around 8:14 AM Beijing time, Bitcoin hit a low of $90,850—the weakest level since mid-January—before partially recovering to hover near $91,400 by 9:12 AM. Despite the rebound, the flagship crypto still posted a 24-hour loss of 4.81%.
Ethereum followed suit, sinking below the critical $2,500 psychological threshold with a staggering 24-hour decline of 11.2%. The broader altcoin market mirrored this bearish momentum. Solana (SOL), XRP, Dogecoin (DOGE), and SUI all registered significant losses, with SUI leading the downside with a crushing 16.7% drop over the same period.
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Mass Liquidations Triggered Amid Market Turmoil
The sudden volatility sent shockwaves through leveraged positions. According to data from CoinGlass, more than 328,300 traders were liquidated in the past 24 hours, with total liquidation volume reaching $961 million**. Of that amount, long positions accounted for approximately **$890 million, underscoring the dominance of bullish bets prior to the downturn.
One of the largest individual liquidations occurred on Binance’s BTC futures market, where a single position worth $10 million was wiped out during the rapid price drop. Such events are not uncommon during high-volatility phases but serve as stark reminders of the risks associated with leveraged trading in crypto markets.
Key Factors Behind the Market Downturn
Several catalysts appear to have contributed to the recent selloff, combining technical weakness with external macro and regulatory developments.
Bybit Security Breach Shakes Investor Confidence
On February 21, 2025, Bybit, one of the world’s largest cryptocurrency exchanges by trading volume, suffered a major security breach. Hackers exploited a vulnerability in the platform's smart contract infrastructure to withdraw over $1.5 billion worth of ETH and stETH, transferring the funds to undisclosed wallets.
This incident triggered immediate panic across the market. On February 22, Bitcoin experienced multiple flash crashes, briefly dipping under $92,000 before rebounding. While no user funds were reportedly lost due to Bybit’s insurance mechanisms, the psychological impact was significant—especially among institutional investors concerned about counterparty risk and platform resilience.
U.S. Regulatory Setback: South Dakota Rejects Bitcoin Investment Bill
Another key factor influencing market sentiment was the rejection of HB 1202, a bill in South Dakota that would have allowed state public funds to allocate up to 10% of their portfolio to Bitcoin.
On February 24, the state’s House Business and Energy Committee voted to postpone discussion of the legislation until day 41 of the legislative session. Since South Dakota’s legislative calendar runs for only 40 days, this effectively killed the bill for the current cycle.
Although the proposal was non-binding at the federal level, its failure sent ripples through the crypto community. Many had viewed it as a potential blueprint for broader U.S. state-level adoption of Bitcoin as a legitimate treasury asset—similar to El Salvador’s national policy or recent moves by corporations like MicroStrategy.
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Market Psychology and Technical Outlook
The confluence of these two events—a major exchange hack and a regulatory setback—created a perfect storm for short-term bearish pressure. Technical indicators also suggest weakening momentum:
- Bitcoin broke below its 50-day moving average.
- Trading volume spiked during the drop, signaling strong distribution.
- Funding rates turned negative across major derivatives platforms, indicating growing bearish sentiment.
However, some analysts argue that long-term fundamentals remain intact. Bitcoin’s scarcity model, halving cycle dynamics (post-2024), and increasing institutional custody solutions continue to support its store-of-value narrative.
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Frequently Asked Questions (FAQ)
Q: Why did Bitcoin drop below $91,000?
A: The decline was driven by a combination of factors including the Bybit security breach, the rejection of a pro-Bitcoin bill in South Dakota, and broader profit-taking after weeks of price consolidation near all-time highs.
Q: How many people got liquidated in this crash?
A: Over 328,300 traders were liquidated within 24 hours, with total losses amounting to $961 million—mostly from leveraged long positions.
Q: Was user money lost in the Bybit hack?
A: No user funds were lost. Bybit confirmed that its insurance fund and risk management systems fully covered the stolen assets, preserving platform solvency.
Q: Does the South Dakota bill rejection mean U.S. states won’t adopt Bitcoin?
A: Not necessarily. While this particular bill failed, several other states—including Texas, Florida, and Tennessee—are actively exploring similar legislation. The movement toward state-level Bitcoin reserves is still evolving.
Q: Is this crash a buying opportunity?
A: Analysts are divided. Short-term volatility remains high, but long-term investors may view pullbacks as entry points, especially given Bitcoin’s historical performance following post-halving corrections.
Q: Which altcoins dropped the most?
A: SUI led the losses with a 16.7% drop, followed by Ethereum (-11.2%), XRP, DOGE, and SOL—all down between 8% and 12% over 24 hours.
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Conclusion: Volatility Is Inevitable—Preparation Is Key
The events of late February 2025 underscore a fundamental truth about cryptocurrency markets: high returns come with high risk. While innovations in blockchain technology and growing institutional interest continue to drive adoption, external shocks—whether technical, regulatory, or psychological—can trigger rapid reversals.
Traders and investors should prioritize risk management strategies such as position sizing, stop-loss orders, and diversification. Staying informed about both on-chain activity and macro-level policy developments can also help anticipate potential market-moving events.
As the ecosystem matures, resilience will become just as important as innovation. Whether you're holding Bitcoin as a long-term hedge or actively trading altcoins, understanding the forces shaping market sentiment is essential for sustainable success.
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