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Highlights
- Upcoming $5 billion Bitcoin options expiry increases market uncertainty and selling pressure.
- Global recession fears, tariffs, and weak corporate earnings drive investors to safer assets, weakening Bitcoin demand.
- Over $1.1B in spot Bitcoin ETF outflows and $1.3B BTC deposits on exchanges signal heightened selling pressure
Bitcoin price has declined sharply, reaching its lowest level since November 2024. The top crypto has dropped by over $12,000 within three days, leading to over $1 billion in leveraged long positions being liquidated. Several factors have contributed to this decline, including market uncertainty, selling pressure from large-scale liquidations, and concerns about economic stability.
Bitcoin Price Falls Below 12%
Bitcoin dropped to $83,500 on February 26, marking a 12% decline over the past seven days. The sharp decrease has resulted in substantial losses for traders holding long positions. Data from CoinGlass shows that the downturn led to the liquidation of over $1 billion in leveraged positions, increasing selling pressure.
Following the liquidations, a recent CoinGape report has highlighted the top 4 crypto tokens to buy during the dip: XRP, Solana, Ethereum, and SUI. These altcoins, despite the recent downturn, are backed by institutional inflows and bullish fundamentals.
Similarly, BTC price decline aligns with broader market fears, including concerns over a potential global economic downturn. Investors are shifting toward safer assets such as U.S. Treasurys and gold amid rising uncertainty.
Another analyst also pointed to the Bybit hack as a key factor contributing to fears in the crypto market, adding to selling pressure.
Bitcoin faces a sharp 21% pullback, weighed down by trade tensions over new tariffs, a $1.4B exchange hack, and ETF outflows, according to Sidrah Fariq, Head of Retail at Deribit.
Market volatility remains in full force.Watch the full interview 🎥👇@AsharqBusiness @crypto pic.twitter.com/GC55w56EZG
— Deribit (@DeribitExchange) February 26, 2025
Additionally, derivatives market activity has influenced Bitcoin price movement. Analysts have noted that the upcoming $5 billion Bitcoin options expiry on February 28 has led to increased volatility. The max pain level for options is around $98,000, suggesting that investors may attempt to keep Bitcoin price within a specific range.
Options Expiry Increases Market Uncertainty
A major factor affecting Bitcoin price is the upcoming $5 billion options expiry on February 28. A large percentage of these options are currently set at higher strike prices, meaning they could expire out of the money. According to Deribit, nearly 78% of expiring Bitcoin options, worth an estimated $3.9 billion, are unlikely to be profitable.
Market participants may attempt to influence Bitcoin price to mitigate losses before expiry. However, extreme fear in the market and recent liquidations make it difficult for bulls to regain control. Analysts suggest that unless Bitcoin recovers to at least $88,000 before expiry, traders holding call options may face losses, further intensifying selling pressure.
Global Recession Fears, Tariffs, and Weak Corporate Earnings
Moreover, macroeconomic factors have played a role in Bitcoin price drop. Economic uncertainty has grown following reports of new U.S. tariffs on imports from Canada and Mexico.
According to reports, Trump’s 25% tariff on EU imports has triggered market uncertainty, with crypto investors anticipating increased volatility. Analysts suggest Bitcoin and other digital assets could benefit as investors seek alternatives amid rising trade tensions.
These policies have pushed investors toward safer assets such as long-term U.S. Treasury bonds, reducing demand for riskier investments like Bitcoin.
Meanwhile, corporate earnings concerns have added to market uncertainty. Nvidia’s upcoming earnings report has raised fears about the AI sector’s growth, with impacts on technology markets. Additionally, Bitcoin-related firms, such as MicroStrategy, have seen their stock prices decline, reflecting investor skepticism about the crypto price stability.
Concurrently, Bitcoin spot ETFs have experienced a wave of outflows, contributing to the downward price trend. On February 24, over $1.1 billion exited spot Bitcoin ETFs, the largest single-day outflow recorded to date. This suggests that institutional investors are reducing their exposure to Bitcoin amid increased market volatility.
Additionally, data from IntoTheBlock shows that $1.3 billion worth of Bitcoin has been deposited onto crypto exchanges. This influx of Bitcoin onto trading platforms often signals increased selling pressure.
At press time, Bitcoin price is $84,743, with a market cap of $1.68 trillion and a 24-hour trading volume of $63.59 billion.
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