Bitcoin marks a dip to $78k as the crypto market witnesses a $500B decline this week. Furthermore, the rising outflows in the Bitcoin ETFs and historical trends warn steeper corrections before a potential bounce back.
By Vishal Dixit
Edited by Marco T. Lanz
Updated
4 mins read
The crypto market witnesses massive turbulence as the bearish trend gains momentum. Bitcoin has dropped to the $80,000 mark, with a 24-hour low set at $78,197.
As multiple fundamental shifts fuel the bearish trend, the market is witnessing one of its worst weeks ever. Amid such conditions, will Bitcoin be able to bounce back?
Over the past 5 days, the crypto market has lost 16% of its value. The total crypto market cap is down from $3.14 trillion to $2.63 trillion. In the same time frame, the Bitcoin market value has dropped from $96,264 to the current market price of $80,638.
Amid such conditions, Darkfrost, a crypto analyst, highlights multiple factors contributing to Bitcoin and the crypto market turning bearish. As per the analyst, ETFs are selling Bitcoin and Ethereum as arbitrage strategies are becoming less attractive.
We are currently printing the worst weekly candle of this bull cycle.
For now, It is advisable to not use leverage or set long position for now.
Key daily support levels are broke, and selling pressure remains high :➡️ ETFs are selling as arbitrage strategies become less… pic.twitter.com/OkXaKzmPQ8
— Darkfost (@Darkfost_Coc) February 28, 2025
Furthermore, bond yields are now offering better returns with lower risk. The Bitcoin ETFs in the past 8 days have recorded consecutive outflows, accumulating to $3.27 billion.
Amid the offloading, BlackRock has turned its strategies to offload Bitcoin, which was once a well-known purchaser in the market. Furthermore, the analyst highlights the recent accusations over Bitcoin and other centralized exchanges transferring assets to market makers like Wintermute.
Additionally, the CME volume is declining with a massive drop in Bitcoin open interest. Currently, Bitcoin Open Interest stands at $48.74 billion, recording a 32% drop from the all-time high of $71.85 billion in the past two months.
On the macroeconomic front, the analyst highlights Donald Trump’s latest policies on trade wars, with increasing tariffs on multiple countries. Recently, Donald Trump has imposed an additional 10% tariff on Chinese trade.
Hence, with growing uncertainty due to tariff wars, a negative sentiment is building up for risky assets like stocks and cryptocurrencies.
Despite the growing uncertainty, crypto believers maintain an optimistic approach. In a recent tweet, Changpeng Zhao, the ex-CEO of Binance, re-tweeted Miles Deutscher’s de-correlation tweets on Bitcoin price cycles.
Recently, Miles, a crypto analyst, highlighted a decorrelation in Bitcoin price after halving. He noted that the recent dip could be a decorrelation compared to previous cycles.
However, Changpeng Zhao pointed out that steep corrections in Bitcoin during halving years have historically occurred between 300 to 400 days after the halving.
I don't know how to read charts, but … 😂 pic.twitter.com/kkZ3dRSv9O
— CZ 🔶 BNB (@cz_binance) February 28, 2025
Ali Martinez, another crypto analyst, has highlighted social sentiment data from Sentiment as a potential recovery signal for the crypto market. According to Martinez, social sentiment toward Bitcoin has shifted significantly.
Social sentiment toward #Bitcoin $BTC has shifted significantly. Based on past trends, moments like this have often presented strong opportunities for contrarian traders. pic.twitter.com/oS7O8Jktc7
— Ali (@ali_charts) February 28, 2025
Based on past trends, movements like this have often presented strong opportunities for contrarian traders. Currently, the weighted sentiment of total Bitcoin is down at -1.126%.
Furthermore, social volume has risen to 2,550. While social volumes are on the rise, the weighted sentiment reveals a bearish shift. Interestingly, similar dips in June 2024, September 2024, and early 2024 rallies followed the same pattern, eventually leading to rebounds.
As per price analysis, Ali Martinez has highlighted a potential 40% correction in Bitcoin. Based on his analysis, every negative crossover in the MACD indicator on the weekly timeframe has led to massive corrections.
Every time the MACD has a bearish crossover on the weekly chart, #Bitcoin $BTC has historically seen an average 40% correction. The MACD just flashed another bearish crossover! pic.twitter.com/c5gyIMh757
— Ali (@ali_charts) February 28, 2025
These corrections, over the past 5 instances since 2021, have resulted in pullbacks ranging from 16% to 63%, with an average correction of 40%. The current crossover has already led to a 16% pullback and could trigger a steeper correction.
History shows that #Bitcoin $BTC often bounces off the 50-week moving average, which currently stands at $74,700! pic.twitter.com/UKGGWS6iOM
— Ali (@ali_charts) February 28, 2025
Additionally, the analyst also highlights the bullish recovery possibility in Bitcoin. However, this comes from the 50-week moving average line that is currently standing at $74,700. Historically, this crucial dynamic average line has provided a bounce back in Bitcoin before witnessing a further decline towards the 200-week MA line.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
