The cryptocurrency market is undergoing yet another tumultuous downturn, with Bitcoin and Ethereum leading the charge downward. Bitcoin initially touched $82,000 but has rebounded slightly, currently trading around $84,200, which marks a 5% drop within the last 24 hours and a staggering 13% decline over the week, according to various market analyses.
The leading cryptocurrency, Bitcoin, now boasts a market capitalization of $1.67 trillion and has recorded trading volumes of approximately $64.8 billion over the past 24 hours. Ethereum did not fare anybetter, currently priced at $2,300 after experiencing a 6.4% decline within the same timeframe and approximately 14% decline over the week. Ethereum's market capitalization stands at $281.4 billion, alongside trading volumes of $29.3 billion.
Among the hardest-hit assets, Mantra emerged as the biggest loser, shedding 8.4% within the last 24 hours, now valued at $7.08 with a market cap of $6.9 billion. The broader cryptocurrency market has suffered immensely, reflecting total market capitalization dropping to $2.77 trillion, marking a drastic 5% decline just within one day.
The latest downturn has triggered widespread liquidations, leaving investors concerned about the market's near-term future. While volatility is no stranger to crypto markets, the scale of this current decline has traders on edge. Whether it signifies a broader correction or merely a temporary setback remains uncertain. For now, the market is enveloped by anxiety and speculation.
Recent data provided by Glassnode highlights over $2.16 billion realized losses between February 25 and 27 alone, hitting new buyers the hardest. Notably, an extraordinary $420 million was withdrawn from BlackRock’s iShares Bitcoin Trust, marking this as the most significant one-day outflow amid Bitcoin's plunge to its yearly low.
Many analysts are attempting to piece together the reasons behind this downturn. According to Coinmarketcap, Bitcoin dropped to $85,131, registering at 4.22% lower over the past day, with Ethereum dropping by 6.44% to $2,330. The overall global crypto market capitalization has reduced to $2.79 trillion, nearly $1 trillion off its peak of $3.73 trillion reached when Bitcoin surpassed $106,000 late last year.
The sharp downturn has also been driven by instilled fear among many as massive liquidations continue to plague the market. According to CoinGlass data, over $765 million was wiped out within the last 24 hours, just adding to the $1.5 billion lost the day earlier on February 25. A major factor has been identified as the sudden shift of sentiment among institutional investors, which led to significant withdrawals, including nearly $1.5 billion from Bitcoin exchange-traded funds (ETFs) over the past week.
The market turmoil began accumulating particularly after the election of President Donald Trump, which shifted initial optimism to concerns about potential aggressive trade policies overshadowing favorable regulations for digital assets. Following Bitcoin's peak post-election, it has now plunged approximately 20%, reflecting reduced investor enthusiasm.
Geoff Kendrick, head of crypto research at Standard Chartered, stated, “These types of losses rarely end well, and I still think the big capitulation is yet to come.” He warned of another potential wave of liquidations if Bitcoin drops below the $80,000 mark, which he highlights as critically significant.
Meanwhile, security concerns, exacerbated by the recent loss from the Bybit hacking incident, have led to doubts over the stability of centralized exchanges where many cryptocurrencies are traded. Pressure mounts with the overall macroeconomic uncertainty against the backdrop of investors’ panic selling.
Despite some analysts promoting the notion of this downturn as merely healthy market correction, the air is thick with apprehension. Addressing the state of the altcoin market, it has witnessed substantial setbacks, currently valuing around $816 billion. The 20-day Exponential Moving Average (EMA) is lower at $876 billion.
One highlighted trader, who took leveraged positions across multiple altcoins, is currently facing staggering unrealized losses of $17.5 million. If Bitcoin falls to $74,571, total losses could reach $25 million. This trader’s takeaway echoes shared sentiments across the market as uncertainty prevails about the next potential market direction.
Traders are left contemplating the future amid fluctuated market trends and bearish pressures. The Relative Strength Index (RSI) did signal possible reversal near oversold territory, providing slight respite for potential rebounds, yet low buying pressures may keep the prices under heavy restraint.