Crypto Crash- Bitcoin Drops Below $91K
Crypto Crash– Bitcoin has recently fallen below $91,000, marking a significant shift as the cryptocurrency remains at a crucial point after months of tight, range-bound trading. Analysts at Bitfinex pointed out that Bitcoin has been trading between $91,000 and $102,000 for almost 90 days, with the market momentum showing signs of stagnation.
According to the Bitfinex Alpha report published on February 24, Bitcoin is facing a period of consolidation due to a lack of momentum for a sustained breakout. “The momentum required for a sustained breakout has been lacking, and this has led to a period of contraction and consolidation across almost all major crypto assets,” the analysts stated. This lack of momentum has resulted in a stall not only for Bitcoin but for the wider cryptocurrency market as well.
Wider Market Impact
Over the past 24 hours, Bitcoin has experienced a drop of more than 4.5%, reaching its lowest level since late November. The broader cryptocurrency market has also seen a decline of around 8%, with the market cap shrinking from over $3.31 trillion to approximately $3.09 trillion. This drop can be linked to ongoing market uncertainties, including comments made by former President Donald Trump regarding planned tariffs on Canada and Mexico, which may have contributed to broader economic fears.
The recent market downturn has resulted in significant liquidations across crypto assets. According to CoinGlass data, over $961 million was liquidated within a single day, with a significant portion of the liquidations coming from long Bitcoin positions, amounting to over $277 million. This increase in liquidations reflects the heightened volatility and investor unease in the current market environment.
Correlation with Traditional Markets and Economic Concerns
Bitfinex analysts noted that Bitcoin is increasingly correlating with traditional financial markets, which are also experiencing stagnation due to macroeconomic uncertainties. The S&P 500 has dropped by 2.3% in the last five trading days, while the Nasdaq Composite saw a 4% decline in the same period. Analysts also pointed out that institutional demand for Bitcoin has slowed significantly, with outflows totaling $552.5 million in the week ending February 21.
In addition, the analysts highlighted concerns surrounding inflation and economic uncertainty, with consumer sentiment dropping to a 15-month low, reflecting growing worries about rising inflation and its potential impact on spending.
With these multiple factors at play, Bitcoin and the broader crypto market remain at a pivotal point as investors watch for any signs of momentum or change.
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.
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