Bitcoin crashes 7%, drops below $89,000 for first time in 3 months as crypto euphoria fades

Bitcoin dropped below the $89,000-mark for the first time in more than three months on February 25, amid a broad sell-off in the crypto market. The crypto coin crashed over 7 percent to trade at $88,893, as per data on Binance at 3.20 pm.

Ethereum meanwhile tumbled 10.5 percent to trade at $2,388. Solana also recorded strong losses, crashing over 13 percent to trade at $137.87.

The market capitalisation of Bitcoin stood at $1.76 trillion.

The sentiment has been bearish in the crypto market following a series of recent setbacks. This included the biggest-ever crypto hack at the exchange Bybit, and a meme coin scandal involving Argentina’s President Javier Milei.

"The Bybit hack was the latest in a string of events, such as questionable memecoin launches, that have brought back unhappy memories for crypto market participants," said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives.

The selloff may also have been triggered by fears of a slowdown in US economy. Data earlier revealed that US consumer sentiment had hit a 15-month low in February, while inflation expectations soared due to President Donald Trump's proposed tariffs. Further, US business activity was also declining, with an expected gloomy outlook, adding to investor worries. The long-term inflation target also ticked up to 3.5 percent, from 3.3 percent earlier.

Notably, the recent sell-off in the crypto market marks a sharp contrast from the earlier rally seen around the US elections. Bitcoin had significantly surged on hopes of pro-crypto regulation after President Donald Trump's election. It had hit a record high of over $108,000 in December. However, the coin has now fallen nearly 18 percent to the current market level.

Dogecoin, which accompanied Bitcoin in its rally around the US elections due to Elon Musk' endorsement, also saw a sharp decline on February 25. The meme coin plunged nearly 13 percent to trade at $0.201 apiece.(With inputs from Bloomberg)