In the past 24 hours, uncertainty and fear in the crypto markets have increased, after Bitcoin sank below $91,000, the “altcoin” season continues to languish and the appetite for memecoins appears to be waning.
Bitcoin has stabilised somewhat on Tuesday morning (UK time), at $91.700. Ethereum experienced even bigger drops of 8-9% and is at just under $2,500 on Tuesday morning. Those sharp falls have erased the past few weeks' gains and created unease among investors.
The widespread panic also manifests itself in the form of massive liquidations. Total liquidations across exchanges have reached $948 million, of which $880 million comes from long positions. This suggests that many investors have been forced to sell in a panic, further amplifying the price fall.
The Fear and Greed indicator, which measures market sentiment, has collapsed to 29 points, indicating extreme fear. This is the lowest level since September 2024 and reflects the growing anxiety that is now characterizing the market.
Several factors are driving the current market weakness. President Trump's seemingly crypto-friendly policies, including a new executive order and the creation of a task force on digital assets, have failed to quell concerns. On the contrary, the memecoins launched by Donald Trump, Melania Trump and the Libra coin backed by the US president have weakened the appetite for memecoins.
Bitfinex which came out with a recent report just before the latest drop, believes that Bitcoin remains at a critical turning point after nearly 90 days of consolidation. While market participants wait for a catalyst, Bitcoin's next big move is likely to be determined by macroeconomic trends and could be decisive, writes Bitfinex.
According to Bitfinex, institutional demand has also slowed significantly. Bitcoin ETF inflows, which peaked at 18,000 BTC per day in November 2024, have flipped to net outflows, with $360 million drawn out just 20. February.
Bitfinex also believes that the US economy is facing increasing challenges as consumer confidence weakens and inflation expectations rise, further stating: “The latest University of Michigan survey shows a sharp drop in consumer sentiment, reaching its lowest level in over a year. Households are preparing for higher inflation, with expectations rising to 4.3 per cent over the next year, up from 3.3 per cent the month before. This change in sentiment suggests consumers are becoming more cautious, which could slow consumer spending and economic activity. The White House's proposed tariffs on imports contribute to inflationary pressures, reversing some of the progress made in disinflation over the past two years”
In the past 24 hours, uncertainty and fear in the crypto markets have increased, after Bitcoin sank below $91,000, the “altcoin” season continues to languish and the appetite for memecoins appears to be waning.
Bitcoin has stabilised somewhat on Tuesday morning (UK time), at $91.700. Ethereum experienced even bigger drops of 8-9% and is at just under $2,500 on Tuesday morning. Those sharp falls have erased the past few weeks' gains and created unease among investors.
The widespread panic also manifests itself in the form of massive liquidations. Total liquidations across exchanges have reached $948 million, of which $880 million comes from long positions. This suggests that many investors have been forced to sell in a panic, further amplifying the price fall.
The Fear and Greed indicator, which measures market sentiment, has collapsed to 29 points, indicating extreme fear. This is the lowest level since September 2024 and reflects the growing anxiety that is now characterizing the market.
Several factors are driving the current market weakness. President Trump's seemingly crypto-friendly policies, including a new executive order and the creation of a task force on digital assets, have failed to quell concerns. On the contrary, the memecoins launched by Donald Trump, Melania Trump and the Libra coin backed by the US president have weakened the appetite for memecoins.
Bitfinex which came out with a recent report just before the latest drop, believes that Bitcoin remains at a critical turning point after nearly 90 days of consolidation. While market participants wait for a catalyst, Bitcoin's next big move is likely to be determined by macroeconomic trends and could be decisive, writes Bitfinex.
According to Bitfinex, institutional demand has also slowed significantly. Bitcoin ETF inflows, which peaked at 18,000 BTC per day in November 2024, have flipped to net outflows, with $360 million drawn out just 20. February.
Bitfinex also believes that the US economy is facing increasing challenges as consumer confidence weakens and inflation expectations rise, further stating: “The latest University of Michigan survey shows a sharp drop in consumer sentiment, reaching its lowest level in over a year. Households are preparing for higher inflation, with expectations rising to 4.3 per cent over the next year, up from 3.3 per cent the month before. This change in sentiment suggests consumers are becoming more cautious, which could slow consumer spending and economic activity. The White House's proposed tariffs on imports contribute to inflationary pressures, reversing some of the progress made in disinflation over the past two years”
