Crypto Markets See Sharp Drop
Bitcoin fell as low as $83,330 late Wednesday, extending its downtrend as the market plunged into panic selling. The world's largest cryptocurrency is under pressure from a number of macroeconomic factors, including trade tensions and global fiscal policy.
The Fear and Greed Index has dropped to 10, reflecting extreme investor anxiety. This is the lowest level since June 2022, indicating widespread pessimism among traders.
Bitcoin ETF Outflows Surge
The selling pressure is largely coming from institutional investors, especially US-based spot Bitcoin ETFs. For two consecutive days, these funds recorded record outflows: $1.136 billion on Tuesday and another $757 million on Wednesday.
Notably, BlackRock's IBIT Bitcoin ETF saw a record outflow of 5,000 BTC on February 26, the highest in the fund's history. The previous record outflow was $332 million on January 2.
This exodus disrupted the basis trading strategy, in which investors take advantage of the price difference between the spot market and futures contracts. The cancellation of these transactions caused Bitcoin prices to slide, hitting their lowest level since November 2024.
Cryptocurrency markets are red
Not only Bitcoin, other major cryptocurrencies were also hit hard. Ether fell more than 5%, trading around $2,300. Top altcoins such as Solana (SOL), Binance Coin (BNB), and XRP also recorded significant losses.
The global cryptocurrency market capitalization fell 5% in 24 hours to $2.88 trillion, according to data from Coingecko.
Leveraged Liquidations Surge During Selloff
The sharp selloff led to a series of liquidations, affecting over 185,186 leveraged traders. The total amount of liquidations in the past 24 hours reached $768 million, with Bitcoin accounting for $461 million and Ether contributing $127 million.
High-risk altcoins such as Solana, Lido, and Sonic also suffered losses of 5–6%, continuing their decline amid negative market sentiment.
Market Outlook: Bearish Pressure and Recovery Opportunities
While the market had been hopeful of pro-crypto policies under the new US administration earlier this year, the overall sentiment has changed amid weak macroeconomic data. Bitcoin’s decline has been accompanied by lower volatility, suggesting that investors are losing confidence in short-term profitability.
According to Ryan Lee, chief analyst at Bitget Research, the market may be undergoing a necessary correction. The liquidation of $3–5 billion in leveraged positions could help eliminate overly risky investments, opening up opportunities for recovery if global trade tensions ease.
While cryptocurrencies are still heavily influenced by macroeconomic factors, the growing participation of large institutions could provide positive momentum in the long term.
