Bitcoin falls below $90,000, raising market concerns; experts recommend diversifying investment strategies

Recent research shows that the Bitcoin price falling below $90,000 may indicate the potential arrival of a bear market, and ordinary investors need to take measures to protect their assets. Experts recommend reducing risk through diversification, setting stop-loss orders, and using stablecoins. The current market dynamics are influenced by multiple factors, including equity market pressure, ETF fund flows, and geopolitical situations, making the situation quite complex.

Market Overview: Performance is sluggish

As of February 26, 2025, the price of Bitcoin has fallen to around $88,000, and other cryptocurrencies are also generally declining. The overall sentiment in the crypto market has returned to the low levels of 2024. The reasons for this round of market decline include selling pressure in the equity market, outflow of funds from Bitcoin ETFs, a large-scale hacking attack on a trading platform, as well as tensions in international trade relations and uncertainties related to policies. These factors have collectively created a risk-averse market environment, negatively impacting the entire cryptocurrency market.

Bitcoin Hit Hard: Multiple Factors Trigger Major Fall

On February 25, 2025, Bitcoin fell below the psychological barrier of $90,000 for the first time since November 2024, closing at $87,169, with a single-day decline of up to 7.25%. This price crash was not triggered by a single event, but rather the result of multiple risk factors overlapping:

1. Macroeconomic policy pressure: The government announced an increase in tariffs on imported goods starting in March, leading to a significant decline in U.S. Treasury yields and a global capital flight from risk assets.

2. Industry Confidence Crisis: A trading platform encountered a theft incident involving $1.5 billion worth of Ethereum. Although the platform quickly activated its insurance compensation mechanism, the scale of this incident has exceeded 2.4 times that of the well-known hacker attack in 2022, severely undermining market confidence in centralized exchanges.

3. Investment Fund Outflow: Bitcoin ETF has seen a net outflow for several consecutive days, with a single day outflow exceeding 516 million dollars on the 24th, setting a new high since the product was launched. Data shows that the top ten ETFs have seen a cumulative outflow of 644 million dollars this month, indicating that institutional investors are reassessing their cryptocurrency asset allocation strategies.

Future Trends: Key Indicators for the Second Half of 2025

Analysts generally believe that the Federal Reserve meeting in mid-March and the G20 finance ministers' summit will become crucial turning points for the market. Although the market still faces challenges in the short term, derivatives market data shows that Bitcoin futures expiring in December 2025 still maintain a premium of $103,000, which suggests that institutional investors still hold basic confidence in the long-term value of Bitcoin.

| Time Node | Observation Indicator | Expected Impact | |---------|--------------|-------------| | March 2025 | Federal Reserve Interest Rate Decision | If rate hike is paused, it may benefit a rebound | | June 2025 | Comprehensive implementation of EU cryptocurrency regulation | May trigger short-term liquidity tightening | | September 2025 | Bitcoin halving cycle effect starts | Historic bullish signal |

A co-founder of a cryptocurrency project suggested: "Investors should closely monitor the dynamic changes in Bitcoin production costs. When the price falls below the miner shut-down price (currently estimated at $78,000), it often indicates that the market bottom is approaching."

Detailed Strategies for Asset Protection

Given the current market downturn, macroeconomic pressures, and regulatory uncertainties may continue to affect market sentiment. During this period of volatility, ordinary users can consider the following strategies to reduce risk and protect their assets:

1. HODL

   • Explanation: Adhere to long-term holding, believing in the long-term value of the assets.
   • Advantages: If the market ultimately recovers, it may yield high returns.
   • Disadvantage: If the market continues to fall, the asset value may further shrink.
   • Applicable scenarios: Suitable for long-term investors who need to be psychologically prepared to cope with short-term fluctuations.

2. Diversified Investment

   • Explanation: Diversify assets into different types, such as other cryptocurrencies, traditional stocks, or bonds.
   • Advantages: Reduces dependence on a single asset, lowering overall risk.
   • Disadvantage: Requires understanding of multiple assets, management costs are higher.
   • Applicable scenarios: Suitable for users with certain investment experience who need to regularly evaluate their portfolio.

3. Dollar Cost Averaging (DCA)

   • Explanation: Invest a fixed amount regularly, regardless of price fluctuations.
   • Advantages: Reduces average purchase cost, suitable for market volatility.
   • Disadvantage: Requires continuous capital investment, which may not be suitable for users with limited funds.
   • Applicable Scenarios: Suitable for users with stable cash flow, long-term investment strategy.

4. Stop-loss order

   • Explanation: Set an automatic sell order that triggers when the price falls to a specific level.
   • Advantages: Effectively manage risks and prevent significant losses.
   • Disadvantage: Short-term market fluctuations may lead to premature triggering, missing out on rebound opportunities.
   • Applicable scenarios: Suitable for risk-averse investors, reasonable stop-loss points need to be set.

5. Transfer to stablecoin

   • Explanation: Converting some or all cryptocurrency assets into a stablecoin pegged to the US dollar for value preservation and risk avoidance.
   • Advantages: Provides stability during severe market fluctuations.
   • Disadvantage: May miss out on the gains brought by market rebounds.
   • Applicable scenarios: Suitable for short-term hedging, attention should be paid to the credibility and reserves of stablecoins.

6. Staking or Yield Farming

   • Explanation: Earn passive income by holding certain cryptocurrencies or participating in DeFi protocols.
   • Advantages: Even if the market falls, a certain income can still be obtained to offset some losses.
   • Disadvantages: Involves smart contract risks, and the returns may not be sufficient to cover asset depreciation.
   • Applicable scenarios: Suitable for users familiar with DeFi, who need to assess protocol security.

7. Risk Management

   • Explanation: Adjust the investment portfolio according to individual risk tolerance.
   • Advantages: Helps make decisions that align with one's own situation, reducing psychological stress.
   • Disadvantages: Requires continuous monitoring of the market, adjustments may increase trading costs.
   • Applicable Scenarios: Suitable for all users, need to regularly assess risk preferences.

Conclusion

Against the backdrop of Bitcoin prices falling below $90,000, ordinary investors need to adopt strategies such as diversified investments, setting stop-loss orders, and using stablecoins to protect their assets, while also focusing on the secure storage of assets and the timely update of market information. Through reasonable investment planning and risk management, investors can reduce losses during potential bear markets and prepare for market recovery.