Bitcoin (BTC) has dropped below $80,000, sparking fears of a deeper sell-off and heightened market volatility. Investors are now questioning whether this decline signals a long-term downturn or just a temporary correction.
Bitcoin’s Sudden Price Drop
Bitcoin’s price took a sharp dive early Friday, slipping from its $83,000 support level and plunging nearly 7% to $79,000—the lowest since November 2024.
🔹 Massive Trading Volume: BTC/USD trading pairs saw a surge in volume, exceeding $71.5 billion over the past 24 hours.
🔹 Liquidations Surge: Over $410 million in leveraged Bitcoin long positions were liquidated, contributing to a total $865.24 million in crypto market liquidations (CoinGlass data).
🔹 25% Decline from All-Time High: Bitcoin is now 25% below its ATH of $109,114, which was recorded on January 20, 2025.
Market Sentiment Hits Extreme Fear
The Crypto Fear & Greed Index remains in the Extreme Fear zone at 16 out of 100, showing a drastic shift from last month’s 72 (Greed). This reflects the growing uncertainty among investors.
Meanwhile, the total crypto market capitalization has dropped by 8.58% in the past 24 hours, now standing at $2.62 trillion.
Why Is Bitcoin Crashing?
1️⃣ Stock Market Weakness
Bitcoin and the stock market often move in correlation, and recent U.S. stock declines have weighed on crypto prices.
- Economic slowdown concerns and weak corporate earnings have rattled investors.
- Geopolitical tensions and U.S. tariff threats have added further pressure.
2️⃣ Hedge Funds Dumping Bitcoin ETFs
Hedge funds appear to be reducing their Bitcoin ETF holdings, increasing sell pressure.
🚨 10X Research Report:
- Over 50% of Bitcoin ETF inflows may have come from hedge funds.
- These funds hold $10 billion in Bitcoin ETFs and are actively selling their positions.
3️⃣ Bitcoin Options Expiry & Increased Volatility
- $4.9 billion in crypto options are set to expire today (February 28), likely influencing short-term price movements.
- $70,000 put options (bets on Bitcoin falling further) have the second-highest open interest on Deribit, suggesting investors expect more downside.
What’s Next for Bitcoin?
As hedge funds exit their positions and market sentiment weakens, Bitcoin faces a critical test. If BTC fails to hold above key support levels, further declines could follow. However, a bounce from current levels could signal strong buying interest.
👉 Will Bitcoin recover or continue its downtrend? Let us know your thoughts in the comments!
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