Bitcoin’s Dramatic Plunge: What Happens When ETFs Go Wild?

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In a turn of events that could only be described as a cosmic joke played by the universe, Bitcoin has decided to take a nosedive below the $90,000 mark for the first time since the fateful month of November 2024. Analysts, those ever-optimistic seers of doom, are now wringing their hands and muttering about further declines, all thanks to a rather enthusiastic sell-off in US spot Bitcoin exchange-traded funds (ETFs). 🧐

On the 25th of February, Bitcoin (BTC) plummeted to a staggering $87,629, a figure not seen since the days when people still thought “HODL” was a type of fish. CryptoMoon Markets Pro data, which sounds suspiciously like a space agency, confirms this over three-month low. 🚀

This delightful decline followed a veritable tsunami of selling in US Bitcoin ETFs, which, in a fit of generosity, recorded more than $516 million in net outflows on the 24th of February alone. It seems these ETFs have taken to selling like a cat to a sunny windowsill, experiencing six consecutive days of selling, according to the ever-reliable Farside Investors. đŸ±

In the six days since the ETFs began their selling spree on the 18th of February, Bitcoin’s price has taken a hit of over 6.2%. It’s almost as if the cryptocurrency is auditioning for a role in a tragic play. 🎭

In a plot twist worthy of a soap opera, the Bitcoin ETFs have recorded a cumulative net outflow of over $1.14 billion in the two weeks leading up to the 21st of February. This marks the highest two-week period of withdrawals since they began trading on the 11th of January, 2024. Talk about a dramatic exit! 💔

Now, if you’re wondering what’s causing this ruckus, it seems the ongoing trade tensions between the US and China are playing a starring role. US President Donald Trump, in a moment of optimism, mentioned that he expects Chinese President Xi Jinping to visit the US. He added that “it’s possible” for the two nations to broker a new trade deal, but, of course, he provided no timeline. Because who doesn’t love a good cliffhanger? ⏳

Bitcoin Declines Amid $1.3 Billion Crypto Liquidations

But wait, there’s more! Beyond the geopolitical shenanigans, crypto investor sentiment has taken a nosedive thanks to internal factors. The industry was rocked by the largest hack in crypto history on the 21st of February, when Bybit lost over $1.4 billion. It’s like watching a soap opera where the villain always wins. đŸ˜±

The market volatility that followed has led to a staggering $1.3 billion in total crypto liquidations over the past 24 hours, affecting a whopping 362,000 traders, according to CoinGlass. Bitcoin alone accounted for $523 million in liquidations. Ouch! 💾

While Bitcoin’s decline has caused some investors to clutch their pearls in horror, similar corrections have been part of the organic flow of the crypto market cycle. It’s like a rollercoaster ride, but without the safety harness. 🎱

The current correction bears a striking resemblance to the 2017 market structure when Bitcoin experienced a 28% correction five times, each lasting two to three months. Raoul Pal, founder and CEO of Global Macro Investor, shared this gem in a post on the 25th of February. It’s almost as if history is repeating itself, but with more drama and fewer wigs. đŸŽ©

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2025-02-25 12:36