Bitcoin Price Volatility: Why It Won’t End Until Real Buyers Step In

Bitcoin Price Drops Below $80K: Is the Worst Yet to Come?

Bitcoin Price – According to Kyle Chasse, founder of Master Ventures, Bitcoin’s (BTC) price will continue to experience significant volatility until genuine buyers—not traders seeking arbitrage—begin entering the market. In a Feb. 27 post on X, Chasse described the current market situation as a “classic case of liquidity games,” where Exchange-Traded Funds (ETFs) have attracted hedge funds that are more focused on short-term profits than long-term holding.

Hedge Funds Profiting from Low-Risk Yield Trades

Chasse explained that for months, hedge funds had been exploiting low-risk yield opportunities by trading the difference between the Bitcoin futures price and the spot price through BTC spot ETFs and CME futures. However, as Bitcoin’s price tumbled, this difference collapsed, making the trade unprofitable—a situation known as the cash and carry trade. Chasse emphasized that hedge funds, in essence, “don’t care about Bitcoin,” and were more interested in extracting yields rather than speculating on Bitcoin’s price movements.

Bitcoin’s Struggle and Market Sentiment

At the time of publication, Bitcoin was trading at $79,532, marking its first time dropping below $80,000 since November 10. The price decline was linked to broader macroeconomic uncertainties, including concerns over Donald Trump’s proposed tariffs. 10x Research head of research Markus Thielen echoed similar sentiments, noting that as crypto market sentiment declined, funding rates also plummeted, which led to the unwinding of many trades.

Future Outlook for Bitcoin

Swyftx lead analyst Pav Hundal noted that while Bitcoin could see further downside, much of the damage may have already occurred. The US inflation data scheduled for Feb. 28 could provide some relief if it comes in lower than expected. As liquidity is pulled from the market, Bitcoin’s price remains in a precarious position, and volatility is expected to continue until the market stabilizes.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.