Key Highlights
- Amid the global trade war waged by U.S. President Donald Trump, the crypto market witnessed one of the biggest downward trends after massive liquidation and selling pressure.
- Bitcoin has plunged around 50% from its peak at $126,000 to $63,000
- Despite the unrealized losses during the correction in the BTC value, Strategy has accumulated additional BTC in January and February
U.S. President Donald Trump’s tariff war has shaken the world economy, including the cryptocurrency market. The cryptocurrency market is suffering from a fresh attack of macroeconomic factors.
The biggest cryptocurrency, Bitcoin, which was once trading above $125,000 in October 2025, has dropped below $64,000 as of now. This fall in February is making it the worst monthly performance since the 2022 crypto winter.
While there are many other factors behind this drop in the crypto market, many experts believe that escalating U.S. tariff policies is the main culprit. Abrupt announcements from Trump have triggered risk-off sentiment. This has also sparked a fear of higher inflation that forced investors to divert their money into safer assets.
U.S. Tariff War with the World Negatively Affected the Crypto Market
BREAKING: President Trump announces a 100% tariff on China starting November 1st and export controls on “any and all critical software.” pic.twitter.com/8eREQVX5B5
— The Kobeissi Letter (@KobeissiLetter) October 10, 2025
The bloodbath in the crypto sector started on October 10, 2025, when Trump posted on Truth Social, announcing an additional 100% tariff on Chinese imports, on top of existing duties. This brings effective rates to 130% on key goods. This announcement was called retaliation against Beijing’s rare-earth and tech restrictions.
The reaction was instant. Crypto, already leveraged to the hilt after a strong 2025 rally, suffered the largest single-day liquidation event in history.
(Source: Coinglass)
According to Coinglass, over $19 billion in positions were wiped out in a single day, with longs dominating. This was the biggest liquidation in the history of the crypto market. More than 1.6 million traders were liquidated. In just a few days, Bitcoin (BTC) crashed around 15% from around $122,000 to as low as $105,000.
Not only Bitcoin and Ethereum, but also Solana witnessed falls of 21% and 40%, respectively. The total crypto market cap shed approximately $350 billion in a few days.
This was not just an ordinary drop, but it was a deleveraging event. The main reason behind this drop was high leverage, which has intensified this downward trend in the crypto market. Weekend liquidity gaps and algorithmic liquidations turned a policy headline into systemic pain.
Later on, Popular analysts at FTI Consulting and CoinGecko called it “leverage meeting liquidity.”
Markets partially recovered in late 2025 as Trump and Xi made progress on trade talks. But the tariff war did not end.
On February 20, 2026, the U.S Supreme Court slammed tariffs imposed under the International Emergency Economic Powers Act, ruling they exceeded presidential authority.
In response, Trump has invoked Section 122 of the 1974 Trade Act, and he announced a 10% global tariff on imports, effective February 24 for 150 days, then hiked it to 15%.
Strategy Scoops Bitcoin Despite Unrealized Losses, Buying the Dip: But Why?
While the crypto market is bleeding, the leading public BTC holding company, Strategy, has grabbed the attention of the community. Strategy, formerly known as MicroStrategy, has kept buying its Bitcoin in February despite the heavy crash in BTC’s price.
(Source: Strategy)
On February 23, the company announced its 100th Bitcoin purchase since 2020. It bought 592 Bitcoins for $39.8 million at an average price of $67,286. This latest purchase was funded through ATM stock sales that generated $39.7 million.
According to the official website, Strategy now holds 717,722 BTC. It acquired these total Bitcoin holdings for $54.56 billion at an average cost of $76,020 per BTC. With BTC trading near $63,000, this holding from Strategy is revolving around $45.6 billion in market value. This creates around $9 billion in unrealized losses.
However, it seems like Michael Saylor is pretty confident in his Bitcoin holding strategy. It added 2,486 Bitcoin for $168.4 million the past week and over 40,150 BTC in January alone. In 2025, it raised $25.3 billion in capital, which makes it the largest U.S. equity issuer for 2 years running to boost the acquisition.
If it’s not going to zero, it’s going to a million. $BTC
— Michael Saylor (@saylor) February 20, 2026
Executive Chairman Michael Saylor shared his confidence in BTC’s long-term conviction in an interview with CNBC. “If it’s not going to zero, it’s going to a million,” he has said. He called BTC digital gold the superior treasury asset in an inflationary world.
Another thought behind these purchases is the “dollar-cost averaging” technique. According to this mechanism, buying fixed amounts generally reduces the average cost over time. The latest drop at $67,000 is actively lowering the $76,000 average cost basis.
Bitcoin. On sale.
— Michael Saylor (@saylor) February 24, 2026
Michael Saylor also clarified his stance once again on no forced selling. He said, “We’re not going to be selling, we’re going to be buying every quarter forever,” he said.
Where BTC Is Heading Amid the Trade War
According to the technical analysis, growing geopolitical tension and tariff war could send BTC toward the $55,000 or $60,000 support level if trade tension increases and liquidity drops.
However, if trade deals happen between the U.S. and China, BTC could see a rebound to $70,000 or $80,000 by Q2.
Sat down with Tom Lee (@fundstrat) during Consensus in Hong Kong to chat about the Crypto Winter, the dip on $ETH, BitMine’s investment in Mr. Beast and more!
01:11 – When will the pain stop for Crypto?
02:14 – Crypto vs Gold, as hedge vs Inflation
06:06 – What’s TradFi’s take… pic.twitter.com/Hq8IlSEMgD— Farokh (@farokh) February 14, 2026
Fundstrat’s Tom Lee recently stated that crypto winter might end as soon as April. Sean Farrell, Fundstrat’s head of digital asset strategy, shared his forecast, where he mentioned that BTC might retrace to the $60,000–$65,000 range in early 2026.
Summing Up
The tariff war that started in October 2025 wiped out over $19 billion in liquidation, and its consequences are still haunting the crypto market. This has declined BTC by exposing leverage and macro sensitivity. Despite this extreme fear market condition and unrealized loss of $9 billion, Strategy is continuously buying BTC. It seems like the company is seeing the current market dip as an opportunity for accumulation.
It is difficult to tell where the crypto market is heading in the current uncertainty and geopolitical tension, such as trade wars and the U.S.-Iran tussle. However, the crypto market is steadily getting institutional investment through investment vehicles like exchange-traded funds (ETFs). According to experts, the crypto market might rebound soon.
Also Read: Best Stablecoin Strategies To Hedge in 2026 Crypto Bear Market
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