During the latest trading session, Bitcoin continued its decline, reaching a three-month low of $84,900 on February 27. This drop marks the first break below $85,000 since early January. Analysts suggest that if Bitcoin fails to hold above $82,000, it could slide further to $80,300 or even test the $75,700 level.
The downturn is fueled by ETF outflows, investor unease, and a significant security breach in the crypto sector.
Bitcoin ETFs Suffer Heavy Losses Amid Market Downturn
The fall in Bitcoin’s price has severely impacted leveraged exchange-traded funds (ETFs) tied to Bitcoin. MSTX and MTSU, which have significant Bitcoin exposure, lost nearly 50% over the past five days as BTC dipped below $85,000.
MSTX, which traded above $43 last week, dropped to $22.50, while MTSU fell to $4.70. Increased trading volumes highlight declining investor interest.
Bitcoin made a brief recovery to $85,400, but renewed selling erased those gains. Investor sentiment remains negative, impacted by geopolitical issues and potential U.S. trade tariffs on Canada and Mexico. Meanwhile, the Federal Reserve’s uncertainty over rate cuts has heightened caution in financial markets.
Bitcoin’s dip below $85K led to a 50% drop in MSTX and MTSU ETFs.
BTC bounced to $85,400, but sentiment remains weak.
Fed’s uncertain rate policy adds to investor caution.
Record Bitcoin ETF Outflows Near $1 Billion
Data from SpotOnChain shows that Bitcoin ETFs saw their largest withdrawals since launch, with nearly $1 billion in outflows. Fidelity’s FBTC recorded the most significant loss, dropping $344.7 million, followed by BlackRock’s IBIT at $164.4 million.
Bitwise and Grayscale ETFs also posted significant outflows of approximately $88 million each. Although data for Ark Invest, managed by Cathie Wood, was not disclosed, industry insiders speculate that it faced substantial withdrawals.
These outflows reflect growing risk aversion among institutional investors, placing additional pressure on Bitcoin. The trend points to increasing skepticism about Bitcoin’s short-term recovery, given the broader market uncertainty.
Security Breach and Liquidations Shake Investor Confidence
Investor sentiment was further impacted by a $1.4 billion hack on the Bybit exchange, marking the largest security breach in crypto history. Despite Bybit’s assurance of tightened security, concerns about digital asset safety continue to unsettle investors.
Additionally, CoinGlass data suggests that a drop below $82,000 could trigger over $1 billion in long liquidations across major exchanges. Forced liquidations can amplify price drops, raising the possibility of a more significant correction. Analysts warn that continued downward pressure could push Bitcoin to $80,300, with a potential fall to $75,700 if selling intensifies.
Despite a minor rebound, Bitcoin remains under stress. Ryan Lee, chief analyst at Bitget Research, noted that Bitcoin is in a consolidation phase, with investor confidence shaken by ongoing market issues. Hong Yea, CEO of GRVT Exchange, emphasized the importance of $82,000 as a key support level, warning that a break below this could lead to further declines.
Bybit’s $1.4 billion hack worsened market sentiment.
If Bitcoin breaks below $82K, over $1 billion in liquidations could accelerate declines to $80,300 or even $75,700.
$82,000 remains a critical support level.
Bitcoin Price Analysis
Bitcoin (BTC) is trading at $84,900, showing a 5% drop in the last 24 hours with a trading volume of $69 billion. The price has broken below key support levels, indicating continued downward pressure.
The daily chart shows a clear breakdown from a descending triangle, with Bitcoin struggling to recover above the 50-day Exponential Moving Average (EMA) at $96,100.
A close below $82,000 could lead to increased selling pressure, targeting the $75,700 support area. The Three Black Crows candlestick pattern confirms a bearish outlook, suggesting more downside risk.
The long-term ascending trendline around $82,000 might provide temporary stability. However, failure to hold this support could trigger a more significant correction.
Conversely, a bounce toward $89,000 is possible if buying interest picks up, although resistance remains strong.
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