bitcoin Plunges, Causing Billions in Crypto Market Losses
Bitcoin’s recent drop to $86,099 has wiped out $1.06 billion across the crypto market. Long positions suffered $873 million in losses. Data from Coinglass on Feb. 26 shows that 230,000 traders faced liquidation in the past 24 hours.
Open interest has fallen by 5%, signaling widespread deleveraging. Exchange inflows have risen by 14.2%, hinting at panic selling. Funding rates have turned negative, reflecting a shift in investor sentiment.
U.S. spot Bitcoin ETFs saw strong withdrawals during the sell-off. Over five days, outflows totaled $1.1 billion, wiht $516 million lost on Feb. 24 alone. Crypto stocks were also hit. Coinbase fell 6.4%, Robinhood dropped 8%, and Bitcoin miners Bitdeer and Marathon Digital fell 29% and 9%, respectively.
IntoTheBlock’s data reveals that 12% of Bitcoin addresses are now holding at a loss, the highest as October 2024. This increases the likelihood of further sell-offs as many investors are underwater.
Whale activity has intensified, with Bitcoin whales offloading over $1.2 billion in the past week. The decline is partly due to worsening macroeconomic conditions. Donald Trump’s proposed tariffs on Canada and Mexico have raised inflation and economic stagnation concerns. Geopolitical tensions between the U.S. and China have also dampened risk appetite.
Conventional markets have also declined, with the Nasdaq Composite down 2.8% and the S&P 500 losing 2.1%. The strengthening U.S. Dollar Index indicates a flight to safety, pressuring riskier assets like Bitcoin.
the $88,000 support level for Bitcoin remains crucial. A drop below it coudl trigger more liquidations. Despite the volatility, traders are looking at $90,000 as a potential recovery level.
