This week, due to the cloud of Trump's trade war, the US stock market and the cryptocurrency market have been bloodbathed. BTC once fell to $78,258 on Friday, a new low since November 10 last year, but with the release of the January PCE index increase in line with market expectations on Saturday, the market's concerns about the resurgence of inflation have been alleviated, and it is also believed that this provides room for the Federal Reserve to cut interest rates 1-2 times this year.
Since Saturday, BTC has rebounded to above $85,000 and fluctuated, reaching a high of $86,547. As of the time of writing, it is trading at $86,296, up 1.5% in the last 24 hours.
Is BTC still not at the bottom?
Although the selling pressure currently shows signs of easing, multiple analysts warn that it cannot be confirmed whether BTC has reached the bottom. According to a Cointelegraph report, some traders point out that BTC's technical indicators were previously severely oversold, and the rebound is within expectations, but if new buyers fail to maintain buying pressure, or the overall economic environment further deteriorates, BTC may fall back to recent lows.
There is also an analysis that BTC may retrace to the $72,000 support level, or even fall below $70,000. Iliya Kalchev, an analyst at the digital asset investment platform Nexo, stated that as the market repositions, BTC may experience a deeper correction, falling into the "sub-$70,000 range", but he also said that "the likelihood of a significant drop below $75,000 is relatively low".
Although the market may fill the gaps left during the rapid ascent period, resulting in temporary pullbacks, BTC is more likely to establish a solid support in the $72,000 to $80,000 range.
This support can lay the foundation for a more sustainable recovery, thereby reducing the likelihood of further retracements.
Another cryptocurrency trader, Magus, believes that the most likely trajectory for BTC is to fluctuate within the $72,000 to $85,000 range in the coming weeks.
Analysts see a drop to $70,000
Other analysts, however, predict that BTC may fall below $70,000 before entering the next stage of the rebound. According to the Global Macro Investor's Global Liquidity Index, BTC's right side (RHS), which represents the lowest bid price at which someone is willing to sell BTC, may be revised down to below $70,000 around the end of February, after reaching a peak of around $110,000 in January.
On Tuesday, BitMEX co-founder Arthur Hayes also reiterated his prediction that BTC will plummet to $70,000 in Q1 or early Q2, and said that hedge funds holding the BlackRock BTC spot ETF $IBIT preparing to take profits and unwind their positions will be one of the triggers for a significant short-term BTC correction.
Further reading: Arthur Hayes: BTC could drop to $70,000, hedge funds taking profits as a trigger
Fear and Greed Index drops to near 3-year low
Additionally, data from Alternative.me shows that the Crypto Fear and Greed Index, which measures the overall market sentiment in the cryptocurrency market, fell to a near 3-year low of 10 at the end of February. The last time investors were in such an extreme state of panic was in July 2022, about a month after BTC plummeted to $17,500, when BTC experienced a over 37% monthly decline in June 2022.
Therefore, although analysts expect BTC to bottom out and begin recovering in the coming weeks, the cryptocurrency market remains constrained by a lack of investor confidence. The Crypto Fear and Greed Index has currently rebounded to the panic zone of 26.
In February, Bitcoin ETFs saw net outflows of 40,000 BTC, with BlackRock's $IBIT recording its first monthly net outflow
Additionally, there are several signs indicating a lack of investor confidence in the crypto market. According to data disclosed by Trader T on March 1st, US Bitcoin ETFs saw net outflows of around 40,000 BTC (approximately $35.46 billion) in February, and all ETFs recorded outflows, including BlackRock's $IBIT, which saw net outflows of around 9,740 bitcoins (approximately $7.21 billion) this month, marking the first monthly net capital outflow since its inception.
CryptoQuant: Binance stablecoin reserves continue to decline, liquidity may tighten further
CryptoQuant analyst @Crazzyblockk wrote in an article on Saturday that he believes the key factor driving the "lack of momentum in the crypto market in 2025" is the continuous decline in Binance stablecoin reserves.
Stablecoins are the primary source of liquidity, driving crypto purchases and market rebounds. The latest data shows that stablecoin reserves have been declining on a weekly basis since the beginning of 2025. Binance's USDT and USDC reserves have been steadily decreasing over the past few months.
The reduction in reserves means a decrease in the funds available for crypto purchases, thereby reducing buying pressure. This is consistent with Bitcoin's inability to break through key resistance levels in recent weeks.
If stablecoin reserves continue to decline, crypto liquidity may tighten further, delaying any significant upward trends. Conversely, a rebound in reserves could signal new capital inflows and renewed demand.
