Bitcoin recorded its sharpest monthly drop in nearly two years, falling by 17.5% in February and slipping into a technical bear market. This marks its 11th worst monthly performance in the past decade, as negative sentiment hit global financial markets.

The cryptocurrency ended February at $84,252 (£67,010), after touching a three-month low of $78,273 on Friday. Having hit an all-time high of $109,071 in mid-January, Bitcoin has now plunged over 20% from its peak, officially entering bear territory.

Trump’s Trade Policies Shake Markets

The decline comes amid increased market volatility, fueled by concerns over a global trade war. President Donald Trump’s aggressive stance on tariffs—aimed at Canada, Mexico, and China—has rattled investors, leading to a sell-off in stocks, crypto, and the US dollar.

Bitcoin initially surged after Trump’s November election victory, as traders speculated that his administration would take a pro-crypto stance and even establish a Bitcoin strategic reserve. However, the lack of clear regulatory direction has now dampened enthusiasm.

Bybit Hack Adds to Crypto Jitters

Adding to the market’s woes, a $1.5 billion cyberattack on the Bybit exchange in February further eroded confidence. The Dubai-based platform suffered one of the largest crypto hacks in history, causing panic among traders and investors.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the market is reeling from a wave of negative sentiment. “The bears have been prowling around, with Bitcoin dropping 20% from its recent peak,” she noted.

Can Bitcoin Recover?

Bitcoin has endured sharp sell-offs before. In June 2022, it suffered its worst month ever, crashing 41% from $31,700 to $18,700, before rebounding 26% in July.

However, the current environment remains uncertain. Unless Trump clarifies his stance on crypto regulation or market sentiment improves, Bitcoin may struggle to regain momentum in the near term.