Bitcoin Price Decreased - What's going on?

The crypto market is known for its volatility, but recent weeks have been particularly turbulent, falling short of investor expectations.

Factors such as unpredictable memecoin trends, shifting U.S. regulations, and the threat of trade wars have put digital assets under pressure, making it harder for them to stabilize.

Bitcoin Price Below $100,000

Bitcoin, which had been steadily trading above $100,000, has now dipped to approximately $96,500, leading to over $2 billion in liquidation. This decline was fueled by uncertainty surrounding the Trump administration’s mixed signals on a potential Bitcoin Strategic Reserve.

While many anticipated this move would strengthen Bitcoin’s standing, the administration’s cautious approach sparked bearish sentiment, dampening market optimism.

Donald Trump and the US Trade War

The recent surge in volatility is closely tied to rising trade tensions. Trump's new steel and aluminum tariffs have reignited concerns about a prolonged trade war, especially with China. Beijing’s retaliatory measures signal that the economic standoff is far from over, creating additional uncertainty for high-risk assets like Bitcoin.

Institutional Confidence vs. Market Liquidity

As the broader market struggles, institutions like MicroStrategy remain committed to aggressive Bitcoin accumulation. However, macroeconomic challenges, including tightening U.S. liquidity and a declining risk appetite, are making Bitcoin’s trajectory more uncertain. For example, the rising U.S. Treasury General Account (TGA) balance suggests reduced money flow in the economy, creating tougher conditions for crypto investments.

Bitcoin’s Future

From a technical standpoint, Bitcoin remains on unstable footing. The Relative Strength Index (RSI) signals a bearish divergence similar to the 2021 peak. If Bitcoin fails to reclaim the $100,000 level, a further drop toward $91,000 could be imminent. Conversely, a strong push above $100,000 could invalidate the bearish outlook, offering a potential recovery.

In this uncertain market, investors should proceed with caution, weighing short-term risks against long-term opportunities. Bitcoin’s next move will largely depend on unpredictable external factors—both political and economic—that continue to shape market sentiment.

Artificial Intelligence and Bitcoin

Not long ago, AI tokens were the rising stars of the crypto market, fueled by hype that drove their market cap to record highs. However, as of February 2025, that momentum appears to be rapidly losing steam.

AI agent tokens, which had been outperforming even popular memecoins, reached a peak market cap of $20.45 billion in mid-January 2025. However, that figure has since plunged to $6.22 billion, marking a staggering $14.23 billion loss in just a few weeks. To put it in perspective, leading tokens in this sector, such as FET and Virtual, have shed between 75% and 90% of their value from all-time highs.

But this downturn isn’t just about price declines. Engagement with AI agent projects has also waned, and the once-thriving pipeline of new AI token launches has nearly dried up. Platforms like Virtuals, which hosted over 1,300 AI-related pairs in November 2024, are now struggling to sustain even 20.

The key question now is whether this AI token downturn signals a deeper issue or if it’s simply a byproduct of the broader crypto market turbulence. With Bitcoin slipping below $97,000 and major altcoins like Ethereum, Solana, and BNB also under pressure, the entire market has been experiencing a rough patch.

Some analysts believe the decline in AI tokens is a natural correction after an unsustainable surge driven by speculative enthusiasm in late 2024. Others argue that while the initial hype may have faded, AI’s long-term potential in the crypto space remains strong.

Despite the current slump, AI continues to hold transformative potential across industries like finance and healthcare. The intersection of AI and blockchain is here to stay, but investor expectations may need to shift. Moving forward, projects that focus on real-world utility and sustainable growth are the ones most likely to thrive.

For now, AI tokens are undergoing a reality check. Their recovery—or further decline—will depend on broader market conditions and whether these projects can deliver on their ambitious promises.