Bitcoin Price Drops to $85,418 Amidst $1.5 Billion Liquidations
Bitcoin (BTC) declined from $96,131 on February 24 to a local bottom of $85,418, resulting in over $1.5 billion in liquidations, primarily from long positions.
Market Overview
- Total crypto market cap fell below $3 trillion for the first time since November 2024.
- Major altcoins like Ethereum dropped more than 10% in the past week.
- US President Trump's proposed trade tariffs and a hawkish US Federal Reserve contributed to bearish sentiment.
Despite recent downturns, sentiment may be improving. Andre Dragosch from Bitwise indicated potential stabilization for BTC, referencing a strong contrarian buy signal from the Cryptoasset Sentiment Index. He noted:
Bearish flows, on-chain, and derivatives data suggest limited downside risks, with favorable risk-reward at current prices.
- US spot Bitcoin ETFs experienced their largest daily net outflow recorded yesterday.
- The Crypto Fear & Greed Index remains bearish, similar to levels during last August's macro capitulation.
- Long-term holders accumulated nearly 20,400 BTC following the sell-off, indicating whale activity amid uncertainty.
Impact on Related Assets
- Strategy stock MSTR dropped 55% from its peak of $543 in November 2024 and currently trades at $249, down approximately 29% over the past month.
- Recent analysis shows that while BTC's cumulative annual growth rate has slowed, it still outperforms gold and stocks.
Contrary views exist; Standard Chartered predicts further downside for BTC before any bullish recovery, with current trading at $87,086, down 1% in the last 24 hours.
