Original author: 1912212.eth, Foresight News
Market sentiment has fallen to freezing point.
In the early morning of February 27, Bitcoin failed to hold the $87,000 position and continued to decline. At around 4 a.m., it even dropped to around $82,000, hitting a new low since November 2024. At the same time, its panic index has dropped to 20, a new low since 2022, and the market is still in a state of extreme fear.
Ethereum has been falling since it failed to stabilize at $2,800. After rebounding to $2,500 recently, it suffered another setback, with the lowest price dropping to around $2,200. SOL has fallen to around $130, a new low since September 2024, due to the negative effects of the meme slump and the huge unlocking on March 1.
Altcoins have mixed gains and losses. In terms of contract data, according to coinglass, the total open contracts on the entire network were liquidated for 24 hours, with a total value of US$765 million, long contracts were liquidated for US$608 million, and the largest single liquidation was worth US$8.2054 million.
Market sentiment has deteriorated and military morale is unstable. What is the problem?
Bitcoin spot ETF data continues to show net outflows
Bitcoin spot ETF data is an important indicator for observing market funds. If the inflow and outflow were balanced in January this year, the situation was completely reversed in February. At the end of February, there were even several large net outflows. On February 25, the single-day net outflow reached 1.14 billion US dollars. From February 18 to February 25, funds outflowed for 6 consecutive days. From February 10 to February 13, there were 4 consecutive days of net outflow, and 3 of them had a net outflow of more than 150 million US dollars.
As for the Ethereum spot ETF, it is also difficult to be optimistic about its recent performance. Data shows that there has been a net outflow for four consecutive days from February 20 to 25, and a net inflow of US$300 million on February 4, but the support effect on the currency price is minimal.
Spot ETF data clearly shows that current market participants are pessimistic about the future price of the currency.
No rate cut in sight
U.S. macro data and Fed policies still have a great impact on the crypto market. The market currently expects the Fed not to cut interest rates in March, so is there still room for subsequent rate cuts?
Feds Bostic said he expects two rate cuts this year, but more or fewer could happen amid pervasive uncertainty. He doesnt expect inflation to suddenly explode, and his overall inflation forecast is a bumpy downward path. He believes inflation will move toward the 2% target, but its not there yet. The Feds goal is to reach the 2.0% target without hurting the labor market.
Bostic said businesses are optimistic about deregulation but are concerned about the impact of tariffs and immigration policy changes. In addition, he sees signs of easing in the labor market. Bostic said the current benchmark interest rate is moderately restrictive and needs to remain so. He said the economic slowdown is a major concern due to the upcoming policy shift, but businesses expect solid economic growth in 2025.
On February 26, the secured overnight financing rate options market expected the Federal Reserve to cut interest rates twice by June, with a potential rate cut of about 50 basis points.
Subsequent market trends
Matrixport released a chart saying
Wall Street has become a major player in Bitcoin, and Bitcoins 60% market dominance remains a key benchmark for the crypto market, with institutional trading behavior increasingly influencing its price action. Concerns about Trumps proposed tariffs and a potential six-month delay in the Bitcoin strategic reserve plan may have contributed to the technical top formation on the current chart. From a technical perspective, Bitcoin could retrace to the nearest support level of $73,000.
Ki Young Ju, CEO of CryptoQuant, said: “If you are panic selling now, you may be a novice. A 30% pullback is common in the Bitcoin bull market cycle: Bitcoin fell by 53% in 2021, but still recovered and set a record high.
Andre Dragosch, head of research at Bitwise Europe, noted that the cryptoasset sentiment index reached its lowest level since August, coinciding with the unwinding of the yen carry trade, which caused Bitcoin to bottom out around $49,000 in August. The cryptoasset sentiment index shows a lot of counter-trend buying signals. Liquidity, on-chain data, and widespread pessimism in derivatives markets suggest that downside risks are relatively limited. At these price levels, the risk-reward outlook looks quite favorable.
