Bitcoin’s rapid drop to $86,099 has resulted in a staggering $1.06 billion loss across the cryptocurrency market, with long positions suffering $873 million in liquidations.
Data indicates that approximately 230,000 traders were liquidated in the past 24 hours, leading to a 5% decline in open interest, suggesting a widespread deleveraging trend. Additionally, exchange inflows have surged by 14.2%, pointing to potential panic selling. Funding rates have turned negative, highlighting a shift in investor sentiment.
The significant market sell-off also saw strong withdrawals from Bitcoin exchange-traded funds (ETFs) in the U.S., with five-day outflows reaching $1.1 billion, including a notable $516 million on February 24 alone.
Crypto-related stocks faced a downturn as well, with Coinbase experiencing a 6.4% drop, Robinhood declining by 8%, and Bitcoin miners Bitdeer and Marathon Digital plummeting by 29% and 9%, respectively.
Data reveals that 12% of all Bitcoin addresses are currently in a state of loss, marking the highest level of unrealized losses since October 2024. This suggests an increased likelihood of further sell-offs, as many investors who purchased near the all-time high of $108,000 find themselves underwater.
Whale activity has surged, with Bitcoin whales offloading over $1.2 billion in the past week. The decline in Bitcoin’s value is largely attributed to deteriorating macroeconomic conditions.
Recent events have rattled global markets, including proposed tariffs by the former president on Canada and Mexico, raising concerns over inflation and economic slowdown. Geopolitical tensions between the U.S. and China, particularly regarding semiconductor trade restrictions, have further dampened risk appetite.
Traditional markets have also seen declines, with the Nasdaq Composite plunging 2.8% and the S&P 500 down by 2.1%. A flight to safety is evident, indicated by the strengthening of the U.S. Dollar Index, which typically exerts pressure on riskier assets such as Bitcoin.
The critical support level for Bitcoin stands at $88,000, with a potential drop below it likely triggering further liquidations. While significant leverage, ongoing economic uncertainty, and decreasing market confidence suggest continued volatility, traders are closely watching the $90,000 mark as a potential recovery level.
