Bitcoin Plunges to $65,000, Warning Signals Flash in Leveraged Market

▲ Bitcoin sharp decline market ©

Bitcoin (BTC) slipping into the $65,000 range appears to be the result not of a single negative catalyst but of a combination of broad market weakness, ETF fund outflows, and pressure from derivatives markets.

According to cryptocurrency data site CoinMarketCap on February 28 (local time), Bitcoin fell 2.38% over 24 hours to $65,869.33. During the same period, the total cryptocurrency market capitalization declined by 2.37%, marking an almost identical drop. The Fear & Greed Index stood at 16, remaining in the “Extreme Fear” zone, reflecting strong risk-off sentiment across the market.

This decline has characteristics of a “beta (correlated) drop,” driven more by sector-wide selling pressure than by Bitcoin-specific bad news. Given that Bitcoin showed nearly the same level of volatility as the broader market, deteriorating macro investment sentiment is considered the primary factor. No clear single catalyst was identified, and the market continued its downward trend amid a lack of directional drivers.

On the supply-demand side, assets under management for U.S. spot Bitcoin ETFs fell from $117.72 billion a month ago to $95.16 billion, adding pressure. Continued net institutional outflows weakened the spot demand base, and the average funding rate remained negative at -0.0017416%. Approximately $82.79 million in liquidations occurred over 24 hours, a significant portion of which were long positions, further intensifying downward pressure.

Technically, Bitcoin is trading below its 30-day simple moving average of $66,755.94. Short-term resistance is identified at $66,969.60, corresponding to the 38.2% Fibonacci retracement level. If the recent swing low of $64,946.04 holds, a short-term rebound attempt may be possible. However, if this support level breaks, further correction toward the $64,000 range could open up.

Ultimately, the key pivot for short-term direction is whether the $64,946 level can be defended and whether ETF fund flows reverse. If funding rates turn positive again and capital flows back into spot ETFs, downward pressure could ease. However, the current structure is still assessed as leaning toward a bearish dominance.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.*