Bitcoin’s price has experienced a sharp decline, dropping 12% to $83,500, its lowest level since November 2024. Several factors are contributing to the ongoing downtrend:
Market Uncertainty & Selling Pressure: Bitcoin’s price has plunged by over $12,000 in just three days, leading to the liquidation of over $1 billion in leveraged long positions. These liquidations have increased selling pressure, exacerbating the decline.
$5 Billion Bitcoin Options Expiry: The upcoming $5 billion Bitcoin options expiry on February 28 has added to market volatility. With a large percentage of these options set at higher strike prices, there’s an increased likelihood that many will expire out of the money. This situation could prompt market participants to influence the price to avoid losses, increasing overall uncertainty.
Macroeconomic Factors: Broader economic concerns are weighing heavily on Bitcoin. Fears of a global recession, coupled with the introduction of new tariffs on U.S. imports from Canada and Mexico, have driven investors toward safer assets like U.S. Treasuries and gold. This has decreased demand for riskier assets like Bitcoin.
Weak Corporate Earnings: Concerns over corporate earnings, particularly with companies in the tech and AI sectors, are contributing to a broader market downturn. Bitcoin-related companies, such as MicroStrategy, are also feeling the pressure, reflecting investor skepticism about the stability of crypto prices.
Bitcoin ETF Outflows & Exchange Deposits: Institutional investors are pulling back from Bitcoin as evidenced by over $1.1 billion in outflows from spot Bitcoin ETFs, the largest single-day outflow recorded. Additionally, over $1.3 billion worth of Bitcoin has been deposited onto crypto exchanges, signaling increased selling pressure.
The Bybit Hack: The recent $1.4 billion hack on the Bybit exchange has amplified concerns about the security of the crypto market, contributing to the market’s negative sentiment.
At the time of writing, Bitcoin’s price is $84,743, with a market cap of $1.68 trillion and a 24-hour trading volume of $63.59 billion. As the market continues to digest these factors, it remains to be seen whether Bitcoin can recover or if further declines are ahead.
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