Bitcoin’s sharp decline to $86,099 has led to over $1.06 billion in liquidations across the crypto market, with long positions suffering $873 million in losses. The price drop has triggered widespread deleveraging, with over 230,000 traders liquidated in the past 24 hours, according to data from Coinglass.
Market-Wide Impact
Open interest has fallen by 5%, signaling a broad reduction in leveraged positions. Exchange inflows have surged by 14.2%, potentially indicating heightened panic selling among investors. Additionally, funding rates have turned negative, reflecting a shift in market sentiment toward bearish expectations.
The sell-off was exacerbated by significant outflows from U.S. spot Bitcoin ETFs. Over the past five days, outflows have totaled $1.1 billion, with $516 million exiting on February 24 alone. This institutional retreat has further pressured Bitcoin’s price.
Crypto-Related Stocks Take a Hit
The downturn in Bitcoin’s value has also impacted crypto-related stocks. Coinbase (COIN) dropped 6.4%, Robinhood (HOOD) fell 8%, and Bitcoin mining firms Bitdeer (BTDR) and Marathon Digital (MARA) saw steep declines of 29% and 9%, respectively.
According to IntoTheBlock’s on-chain data, 12% of all Bitcoin addresses are currently holding at a loss—the highest percentage of unrealized losses since October 2024. This suggests a growing risk of additional sell-offs, as many investors who bought at Bitcoin’s all-time high of $108,000 are now underwater.
Macroeconomic Pressures and Whale Activity
The crypto market downturn has coincided with worsening macroeconomic conditions. Donald Trump’s proposed tariffs on Canada and Mexico have raised inflation concerns, while ongoing U.S.-China tensions over semiconductor trade restrictions have undermined investor confidence in risk assets.
Traditional financial markets have also suffered, with the Nasdaq Composite plummeting 2.8% and the S&P 500 dropping 2.1%. Meanwhile, the strengthening of the U.S. Dollar Index suggests a broader flight to safety, placing additional pressure on Bitcoin and other speculative assets.
Whale activity has accelerated amid the downturn. Over the past week, Bitcoin whales have offloaded more than $1.2 billion, adding to the selling pressure. This mass liquidation suggests that large investors are repositioning their portfolios in response to market uncertainty.
Key Support and Future Outlook
Bitcoin’s $88,000 support level remains crucial. A breakdown below this level could trigger another wave of liquidations, while a recovery above $90,000 is seen as a potential turning point for bullish momentum. However, with excessive leverage, economic uncertainty, and waning market confidence, traders should brace for continued volatility in the near term.
