The value of Bitcoin experienced a sharp decline, decreasing to $86,099 and causing a substantial $1.06 billion decrease in the digital currency marketplace. Individuals wagering on Bitcoin’s appreciation were severely impacted, enduring losses totaling a staggering $873 million.
Open interest, an indicator of the capital invested in Bitcoin futures, decreased by 5%, suggesting that individuals are withdrawing their funds from precarious investments. Information from Coinglass indicates that approximately 230,000 traders were liquidated in the previous 24 hours, implying that their positions were automatically terminated due to insufficient funds. Funding rates, which reflect the overall market sentiment, have become unfavorable, implying that investors are currently more pessimistic than optimistic. To exacerbate the situation, exchanges experienced a 14.2% rise in Bitcoin inflows, potentially indicating increased panic selling on the horizon.
This significant sell-off coincided with substantial outflows from U.S. Bitcoin ETFs. On February 24th alone, these ETFs shed $516 million, bringing the total outflow over five days to a massive $1.1 billion.
The suffering was not exclusive to Bitcoin itself. Stocks associated with cryptocurrencies also experienced a decline, with Bitcoin miners Bitdeer and Marathon Digital plummeting 29% and 9%, respectively. Even prominent companies like Coinbase and Robinhood saw their stock values decrease by 6.4% and 8%.
According to on-chain data from IntoTheBlock, approximately 12% of Bitcoin addresses are presently underwater, representing the highest level of unrealized losses since October 2024. With numerous investors who acquired Bitcoin near the all-time high of $108,000 currently facing losses, there is an increased likelihood of even greater selling pressure.
Adding to the disorder, Bitcoin whales (large holders) have sold off over $1.2 billion worth of Bitcoin in the past week, implying that even the major players are losing faith. CryptoQuant Head: Bitcoin’s Upward Surge Has Concluded
Therefore, what is the cause of this unexpected decline? A combination of factors, but worsening macroeconomic circumstances appear to be the primary reason.
Donald Trump’s intention to impose tariffs on goods from Canada and Mexico has ignited concerns about inflation and economic stagnation, unsettling global markets. Trade conflicts, particularly concerning semiconductors, and persistent geopolitical tensions between the U.S. and China have further diminished risk appetite.
The conventional financial markets have also been affected. The S&P 500 decreased by 2.1%, and the Nasdaq Composite declined by 2.8%, reflecting the widespread anxiety in the market.
A more robust dollar index usually indicates heightened risk avoidance, which frequently exerts strain on more precarious holdings such as Bitcoin.
Dealers are observing the $90,000 mark as a prospective rebound spot, even though persistent economic ambiguities, diminished market assurance, and extreme influence imply greater instability in the future. The $88,000 support threshold for Bitcoin is still vital; a breach beneath this might spark another liquidation.
