Bitcoin Price Consolidation and Market Downturn
Bitcoin (BTC) price movements reflected a period of consolidation before dropping below $90,000 after BTC failed to break above its all-time high in February. According to the latest edition of the “Bitfinex Alpha” report, macroeconomic uncertainty worsens this scenario.
Recent Bitcoin Price Fluctuations
- Bitcoin fluctuated within a 6.5% range over the past week.
- Peaked at $99,574 on Feb. 21 before closing at $96,346.
- Currently dropped by 7.5% to $88,600 as of press time.
Market Downturn Triggers
- Hack involving crypto exchange Bybit.
- Sharp decline following the expiration of S&P 500 options.
- Bitcoin dropped 5.9% from recent peak as of Feb. 22.
Decline in Digital Assets
- Ethereum and Solana retreated by 16.9% and 33.1% respectively.
- Memecoins saw a decline of 37.4% after a previous rally.
- Broader financial market, including the S&P 500, also struggled.
Institutional Demand and ETF Flows
Bitcoin exchange-traded funds (ETFs) have seen a marked slowdown in inflows, indicating reduced institutional interest. US-based Bitcoin ETF purchases have dropped from daily acquisitions of 4,000–5,000 BTC in November to less than 1,000 BTC per day over the past week.
ETF Outflows and Participation
- ETF outflows peaked at $360 million on Feb. 20.
- Buy-side activity resilient at lower price levels.
- Ethereum ETF participation remains weak.
Reduction in Capital Inflows
- Perpetual futures market shows a decline in open interest.
- Bitcoin, Ethereum, and Solana witnessed reductions in OI.
- Memecoins experienced the steepest drop in OI.
Potential for Further Decrease and Negative Sentiment
Before last night’s crash, Julio Moreno, head of research at CryptoQuant, highlighted on-chain data indicating that Bitcoin demand is in negative growth territory. This is the first time BTC has entered this area since September.
Negative Investor Sentiment
- Increased negative sentiment among investors.
- Comparison to previous market sentiment levels.
- Historical data reflecting potential deeper correction.
