Bitcoin is currently heading toward its most severe monthly downturn since the cryptocurrency market collapse of June 2022, with the digital asset experiencing significant losses as it tests critical support levels. The token's performance in February has been particularly bleak, marking a sharp contrast to global financial markets that have shown some renewed risk appetite.
Steep Decline and Historical Context
The original cryptocurrency fell approximately three percent to around $62,557 during Tuesday's trading session before partially recovering. This movement contributes to a roughly 24 percent decline for February alone, positioning it for the worst monthly performance since the dramatic events of 2022. That year witnessed the implosion of the TerraUSD stablecoin project, which triggered a cascade of failures across the crypto ecosystem including major players like Three Arrows Capital and BlockFi.
Extended Downtrend and Market Factors
Bitcoin is now on track for its fifth consecutive monthly decline, representing the longest losing streak since 2018—a period remembered for the unraveling of the initial coin offering boom. This extended selloff, which began in October, coincides with broader risk-off sentiment across global markets following former President Donald Trump's announcement of plans to raise global tariffs to 15 percent.
"President Trump's decision to raise global tariffs to 15 percent rattled risk assets broadly, and Bitcoin moved with them," explained Rachael Lucas, crypto analyst at BTC Markets. "Despite the 'digital gold' narrative, Bitcoin continues to trade as a risk asset. When macro fear spikes, capital rotates toward traditional safe havens. Bitcoin is not there yet."
Technical Analysis and Support Levels
Since the massive selloff commenced four months ago, Bitcoin has broken through multiple key support levels as it trended lower. The cryptocurrency slipped below $60,000 in early February, creating what analysts describe as a steady tug-of-war between bullish and bearish forces at current price levels.
"Bitcoin slipped below $60,000 in early February, but there was a steady tug-of-war near current levels, drawing attention to the outcome of the local battle between bulls and bears," noted Alex Kuptsikevich, chief market analyst at FxPro. "The outcome will determine whether we see a recovery rebound or a new downward momentum."
Critical Thresholds and Market Sentiment
Bitcoin is approaching its 200-week moving average of $58,503, according to Tony Sycamore, an analyst at IG Australia. Whether the token maintains its position above this level—as it managed to accomplish in early February—could determine whether prices stabilize or continue their descent.
Conversely, a decline below the $58,000 to $60,000 support zone "would likely open the door to a deeper pullback," Sycamore warned in his research note.
Broader Market Pressures
The entire cryptocurrency market is experiencing significant pressure, with the total market value of all digital assets declining by more than $120 billion between Monday and Tuesday alone. Ether, the second-largest cryptocurrency, fell as much as 3.3 percent to $1,802 during Tuesday's trading session.
Market indicators reflect cautious sentiment, with United States-listed spot Bitcoin ETFs witnessing over $200 million in outflows on Monday. Meanwhile, demand for downside protection in options trading remains approximately twice that of bullish bets, according to data from Deribit.
Legal Repercussions from 2022 Collapse
The aftermath of the 2022 crypto market calamity continues to reverberate through the industry. On Monday, the administrator for Terraform Labs—the entity behind the failed TerraUSD stablecoin—filed a lawsuit against Jane Street Group LLC. The complaint alleges that Jane Street utilized non-public information to front-run trading activities that allegedly hastened Terraform's collapse.
A Jane Street spokesperson characterized the lawsuit as "desperate" and "a transparent attempt to extract money" in an official statement responding to the allegations.
