This past weekend, the crypto market found no respite. After a narrow-range consolidation on Saturday and Sunday, Bitcoin came under renewed pressure during today's European and American trading hours, briefly falling below the $64,000 mark to hit $63,924.44, setting a new low since February 6th. At the time of writing, the price has rebounded slightly to around $64,800, with a nearly 4% drop over 24 hours.
This is a liquidity drought that has lasted for days. Since February 20th, Bitcoin has been in a downward trend for four consecutive trading days, with a cumulative drop of over 7%. Compared to the all-time high of nearly $127,000 in October last year, the current price has almost halved.
Market sentiment has frozen over amidst the persistent volatility. The Crypto Fear & Greed Index slipped to a single-digit 5 yesterday, remaining in the extreme "Fear" zone for three consecutive days: this is the lowest reading since the market panic in January this year.
Macro: Tariff Turmoil and Shaken AI Narrative
Although last week's US CPI data showed easing inflationary pressures, the market's focus has quickly shifted to new variables in the global trade situation.
Last Friday, the US Supreme Court rejected former President Trump's previous use of "emergency powers" to impose tariffs. Subsequently, Trump's camp indicated it would pursue a new legal path to advance temporary global tariffs, potentially raising the rate from 10% to 15%. The EU immediately responded, demanding the US comply with existing trade agreements. This back-and-forth has forced the market to reassess the possibility of escalating global trade friction. Additionally, heightened geopolitical uncertainty in the Middle East, with a new round of US-Iran negotiations scheduled for the 26th in Geneva, Switzerland, adds to the mix.
Risk assets are extremely sensitive to this. US tech stocks fell in tandem, with software and AI-related companies under pressure.
Adding to the woes, during Monday's US trading session, AI bellwether IBM plunged over 11% due to Anthropic's release of an AI tool that automates COBOL language, dragging down the broader tech sector. Market analysis firm Ecoinometrics pointed out that Bitcoin is currently extremely sensitive to downside risks in the US stock market. When US tech stocks confirm a structural downtrend, Bitcoin often follows closely behind and amplifies the decline. The low-volatility structure that previously supported Bitcoin's independent rally has been broken due to deep institutional involvement, shifting to a higher correlation with tech stocks.
Institutions: From "Basis Trade" to Full Risk-Off
A more critical variable lies with institutional capital.
According to SoSoValue data, for the week ending February 20th, US spot Bitcoin ETFs recorded approximately $316 million in net outflows; Ethereum ETFs saw about $123 million in net outflows. This marks multiple consecutive weeks of net capital withdrawal.
ETF flows were the core marginal driver of the previous bull run. Net outflows imply two things:
First, institutions do not see the current price as "significantly undervalued" in the short term;
Second, the price lacks the support of passive, long-term capital.
The "basis trade" (buying spot or ETFs while shorting futures to lock in the price difference), previously popular among institutions, has become unprofitable as prices have fallen. In the absence of sustained ETF inflows, the price action relies more on derivative-driven capital. Once macro conditions weaken, leveraged positions are prone to stampedes.
On-Chain: Long-Term Holder Selling Slows, Miner Selling
Amid the gloom of continued price declines, on-chain data also reveals some subtle signals.
Glassnode notes that the 7-day average net realized profit/loss for investors (short-term holders) has narrowed from -$1.24 billion/day on February 6th to -$480 million/day, indicating that loss-selling is weakening but has not yet ended.
This suggests a typical "bottom handover period": selling pressure still exists, but the intensity of panic has subsided.
Stratifying the market:
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Long-term holders show no significant panic;
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Short-term capital is still exiting at a loss;
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In terms of sentiment indicators, the Crypto Fear & Greed Index has slipped into the "Extreme Fear" zone.
This combination usually corresponds to a consolidation and bottoming process, rather than a trend reversal.
Meanwhile, subtle changes are also occurring on the supply side.
Bitdeer disclosed that as of February 20th, it had sold all 943 of its self-held Bitcoins, reducing its book BTC to zero, stating this move was to储备 liquidity for land and data center expansion. Against the backdrop of falling prices and compressed mining profits, miners selling their reserve coins can exacerbate阶段性 selling pressure. While this is not industry-wide behavior, it can be magnified and overinterpreted by the market during fragile sentiment phases.
Outlook: NVIDIA Earnings Could Be Short-Term Inflection Point
The market is searching for the next directional cue amidst the panic. Currently, Bitcoin is struggling at a key technical support level—the 200-week Exponential Moving Average (EMA) around $68,350 has been breached.
Analyst Tom McClellan warned that although the "smart money" in CME futures is rapidly reducing short positions, this merely reflects market conditions rather than a clear rebound signal. If key support is lost, Bitcoin still risks a further decline into the $40,000 to $50,000 range. Ned Davis Research strategists offered an even more pessimistic hypothesis, suggesting that if this bear market turns into a "crypto winter," Bitcoin could fall to $31,000.
Against this backdrop, Google searches for "Bitcoin is dead" have quietly climbed in recent months.
But bulls like Arthur Hayes, Tom Lee, and Michael Saylor are still vocal through various channels: it's only a matter of time before Bitcoin returns to and even surpasses its historical highs.
In the short term, a potential variable lies in this week's macro events. Digital asset company Keyrock pointed out that NVIDIA's earnings report, scheduled for February 25th, could be the next major catalyst for the market. Given the current market's extreme sensitivity to the AI narrative and Bitcoin's high correlation with tech stocks, NVIDIA's earnings guidance will directly impact the risk appetite of the tech sector and the overall market, subsequently transmitting to the crypto market.
In summary, amidst heightened macro uncertainty and liquidity drought, Bitcoin is in a phase of lacking liquidity and fragile confidence. The market's self-repair might require waiting for the complete cessation of selling by long-term holders or the emergence of new macro policy signals (such as a clear dovish tilt from the Fed). Until then, any rebound is likely to face heavy selling pressure.
Author: Bootly
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