Bitcoin Plunges Below $65,000 Amidst Escalating Global Tariff Uncertainty – February 2026 Analysis

Breaking: Bitcoin Plunges Below $65,000 Amidst Escalating Global Tariff Uncertainty – February 2026 Analysis

Bitcoin (BTC) has experienced a significant correction, dropping sharply below the crucial $65,000 mark in late February 2026, driven primarily by renewed global tariff uncertainty and substantial institutional outflows from spot Bitcoin Exchange-Traded Funds (ETFs). This downturn, which saw the world's largest cryptocurrency fall by over 4% in a single day, comes as a U.S. trade policy shock, notably President Trump's decision to increase the worldwide tariff rate to 15% on February 22, 2026, sends ripples of anxiety across global financial markets and risk assets. This latest dip positions Bitcoin within a volatile range, prompting investors to reassess their portfolios and long-term crypto strategies.

The Catalyst

The immediate trigger for Bitcoin's swift descent below $65,000 was a confluence of macroeconomic and crypto-specific factors. A primary driver was the escalating global trade tensions, specifically the U.S. trade policy shock announced on February 22, 2026. President Trump's move to raise global tariff rates to 15% has created immense economic uncertainty, impacting financial markets' willingness to embrace risk. Tariffs traditionally increase the cost of imported goods, potentially leading to inflation and prompting central banks, including the RBI, to consider adjusting monetary policy, which can affect all financial markets, including cryptocurrencies.

Adding to this pressure were significant outflows from U.S. spot Bitcoin ETFs. For the week ending February 22, 2026, these ETFs registered net outflows of $315.9 million, indicating a reduction in institutional conviction and contributing to the selling pressure. This trend aligns with a broader "risk-off" sentiment dominating global markets, characterized by rising real yields, a strengthening U.S. dollar, and a general deterioration of risk appetite.

Financial Forensics

The recent price action for Bitcoin has been marked by volatility and a rapid unwinding of leveraged positions. Bitcoin fell approximately 4.2% during the last day to hover near $65,000 as of February 23, 2026. Earlier in February, Bitcoin had already dropped below $75,000, reaching lows since April 2025. This technical breakdown below key support levels, such as $65,000, often triggers stop-loss orders and accelerates selling pressure, amplifying the downside movement. The market also witnessed a "capitulation event" with a spike in forced sales, contributing to significant realized losses.

In the Indian context, Bitcoin prices have been observed to trade around ₹61-62 Lakhs as of February 21, 2026, after previously being in the ₹67-75 Lakh range earlier in February 2026. India continues to be a crucial market, leading in grassroots cryptocurrency adoption with over 100 million crypto users, largely driven by retail participation.

Here's a comparison of Bitcoin's recent performance metrics:

Bitcoin Performance Snapshot (Approximate as of February 23, 2026)

Metric	Value (USD)	Change (24h)
Current Price	~$65,000	-4.2%
Market Capitalization	~$1.27 Trillion	Down
Fear & Greed Index	5 (Extreme Fear)	Significantly down
Institutional ETF Flows (Week ending Feb 22)	-$315.9 Million	Outflows
Source: FinScann Analysis, based on market data

Market Impact

The ripple effects of Bitcoin's dip are evident across the broader cryptocurrency ecosystem. Altcoins, which typically carry higher risk profiles, have experienced even sharper percentage losses, and decentralized finance (DeFi) protocols have seen increased liquidations as collateral values diminished. Bitcoin's strong correlation with traditional risk assets means that during periods of macroeconomic uncertainty, it tends to behave more like a high-beta asset than a safe haven.

The Fear & Greed Index, a key barometer of market sentiment, has plummeted to 5, signaling "extreme fear" among investors. This indicates widespread panic selling, though some analysts suggest such extreme fear often precedes potential rebounds. The market's current state suggests a phase of deleveraging, with leverage having been significantly reduced.

Key Takeaways

• Tariff Uncertainty is Key: Global trade policies, especially new tariffs, introduce significant macroeconomic uncertainty, impacting investor sentiment towards riskier assets like crypto.
• Institutional Flows Matter: Substantial outflows from Bitcoin ETFs signal a retreat by institutional investors, intensifying selling pressure and highlighting Bitcoin's growing connection to traditional finance mechanics.
• Volatility Remains High: Expect continued price swings as the market digests macroeconomic news, regulatory developments, and shifts in liquidity.
• India's Resilience: Despite global headwinds, India's retail crypto adoption remains strong, but investors must navigate complex tax regulations (30% tax on gains, 1% TDS).
• Long-Term Outlook Divergent: While short-term pain is evident, some analysts maintain a bullish long-term outlook, citing potential for recovery towards $80,000 - $150,000 by year-end 2026 under favorable conditions.

FinScann Verdict

The current dip in Bitcoin below $65,000 is a sharp reminder of cryptocurrency's sensitivity to global macroeconomic shifts, particularly trade policies. While the short-term outlook suggests continued volatility, the fundamental drivers of long-term adoption and institutional interest in Bitcoin remain. Investors should exercise caution, closely monitor global trade developments, and consider dollar-cost averaging into positions rather than making large, impulsive moves.

Q: What caused Bitcoin to drop below $65,000 in February 2026? A: Bitcoin's drop was primarily triggered by rising global tariff uncertainty, specifically President Trump's announced 15% global tariff rate, and significant institutional outflows from spot Bitcoin ETFs. Other factors include a broad risk-off sentiment in global markets, rapid deleveraging, and technical selling after breaking key support levels.

Q: How do tariffs impact cryptocurrency prices? A: Tariffs create economic uncertainty, which often leads investors to move away from perceived high-risk assets like cryptocurrencies. They can also strengthen the US dollar, raise inflation expectations, and prompt central banks to adjust interest rates, all of which indirectly influence crypto prices.

Q: Will Bitcoin recover from this downturn in 2026? A: The outlook is mixed but generally leans towards potential recovery in the medium to long term. Some analysts project Bitcoin could recover to $80,000 by the end of 2026 or even $150,000 by year-end under bullish scenarios with renewed institutional interest and regulatory clarity. However, recovery depends on improved macroeconomic conditions and consistent capital inflows.

Q: Is now a good time to buy Bitcoin? A: This decision depends heavily on an individual's risk tolerance and investment strategy. The current "extreme fear" sentiment and depressed prices might present a buying opportunity for long-term investors. However, persistent uncertainty regarding tariffs and potential regulatory actions means further downside is possible. Diversification and consulting a SEBI-registered financial advisor are recommended.

Q: How has India's crypto market reacted to the global dip? A: India, a leader in retail crypto adoption, has seen its Bitcoin prices fluctuate alongside global movements, with BTC trading around ₹61-62 Lakhs recently. Despite the global dip, regulatory clarity in India, such as the application of money laundering provisions, has been viewed positively by the domestic cryptoverse, fostering a more structured environment.

Disclaimer: For information only; not investment advice. Stock market investments carry risks. Please consult a SEBI-registered advisor before investing. FinScann assumes no liability for decisions made based on this report.