Bitcoin once fell to around $82,000.

Author: 1912212.eth, Foresight News

The market sentiment has plummeted.

In the early morning of February 27, Bitcoin failed to hold the $87,000 position and continued to slide, even briefly dropping to around $82,000 around 4 a.m., a new low since November 2024. At the same time, its fear index has dropped to 20, a new low since 2022, and the market is still in a state of extreme fear.

Ethereum failed to stabilize above $2,800 and slid all the way down, recently rebounding to $2,500 before being hit again, with a low of around $2,200. Due to the waning of memes and the negative impact of the massive unlocking on March 1, SOL has fallen to around $130, a new low since September 2024.

Altcoins have seen mixed gains and losses. In terms of contract data, according to Coinglass, the 24-hour global open interest liquidation was $765 million, with $608 million in long liquidations, and the largest single liquidation was worth $8.205 million.

The deteriorating market sentiment and unstable morale, where is the problem?

Bitcoin Spot ETF Data Continues to Show Net Outflows

Bitcoin spot ETF data is an important indicator for observing market capital flows. If the inflows and outflows were balanced in January this year, the situation has completely reversed by February. By the end of February, there have even been several large net outflows. On February 25, the net outflow reached $1.14 billion, and from February 18 to 25, there have been 6 consecutive days of capital outflows, while from February 10 to 13, there were 4 consecutive days of net outflows, 3 of which exceeded $150 million.

As for Ethereum spot ETFs, the recent performance has also been difficult to be optimistic about. Data shows that from February 20 to 25, there have been 4 consecutive days of net outflows, and on February 4, there was a net inflow of $300 million, but the supporting effect on the coin price was minimal.

The spot ETF data clearly shows that the current market participants are pessimistic about the subsequent coin price.

Interest Rate Cuts Remain Elusive

U.S. macroeconomic data and Federal Reserve policy still have a huge impact on the crypto market. The market currently expects the Fed not to cut rates in March, so is there still room for rate cuts going forward?

Federal Reserve Governor Bostic said he expects two rate cuts this year, but with the "widespread" uncertainty, there could be more or fewer rate cuts. He expects inflation not to suddenly explode, and his overall inflation outlook is a bumpy downward path. He believes inflation will move towards the 2% target, but has not yet reached it. The Fed's goal is to reach the 2.0% target without harming the labor market.

Bostic said businesses are optimistic about deregulation, but are concerned about the impact of changes in tariff and immigration policies. In addition, he believes there are signs of easing in the labor market. Bostic said the current benchmark rate is moderately restrictive and needs to be maintained. He said that economic slowdown is a major issue due to the upcoming policy changes, but businesses expect the economy to grow steadily in 2025.

On February 26, the secured overnight financing rate options market expects the Federal Reserve to cut rates twice by June, with a potential rate cut of about 50 basis points.

Outlook for the Future

Matrixport released a chart showing

Wall Street has become an important player in Bitcoin, and Bitcoin's 60% market dominance is still the key benchmark for the crypto market, with institutional trading behavior increasingly influencing its price trend. Concerns about the potential six-month delay in Trump's proposed tariffs and Bitcoin strategic reserve plan may be one of the reasons for the current technical top formation on the chart. From a technical perspective, Bitcoin may retrace to the recent support level of $73,000.

Ki Young Ju, CEO of CryptoQuant, said, "If you're panic selling now, you're probably a newbie. 30% corrections are common in Bitcoin bull market cycles: Bitcoin fell 53% in 2021 but still recovered and hit a new all-time high."

Andre Dragosch, Head of Research at Bitwise Europe, pointed out that the crypto asset sentiment index has reached its lowest level since August, coinciding with the unwinding of the yen carry trade, which caused Bitcoin to bottom around $49,000 in August. The crypto asset sentiment index is showing a strong contrarian buy signal. The generally pessimistic sentiment in liquidity, on-chain data, and the derivatives market suggests that downside risks are relatively limited. At these price levels, the risk-reward outlook looks quite favorable.