Why is Bitcoin Going Down?
Satoshi Street is covered in blood, with little hope of recovery in the coming days, and the market will drop to its lowest level, with a key level of $89,000 for Bitcoin trading.
After the $108,000 show in January, major investors took their money out of our spot Bitcoin ETFs due to the continuous increase in Bitcoin prices. On February 24, the outflow of U.S. spot Bitcoin ETFs was $517 million, the largest in seven weeks data. This marks the fifth day of the withdrawal, with BlackRock’s ishares Bitcoin Trust (IBIT) losing $159 million, while Fidelity’s wise Bitcoin Fund saw a $247 million outflow. Other funds, such as Bitwise, Invesco and Grayscale, drew a substantial withdrawal, lowering Bitcoin by 5% to $91,000, and then lowering Bitcoin to $89,175, down 2.25% in the last hour.
Hold or sell?
Bitmex co-founder Arthur Hayes blames Trump’s tariff policy changes warn The Bitcoin could drop to $70,000 as hedge funds relax their positions. Many of these funds invest in Bitcoin ETFs while betting on Bitcoin futures on the Chicago Mercantile Exchange (CME). The strategy is called “basic trade” and helps them earn the smallest profit by leveraging the price gap between spot Bitcoin ETFs and futures contracts.
However, as the price of Bitcoin fell, hedge funds lost profits and exited by selling ETF stocks and buying back CME futures. Hayes expects this to continue during U.S. trading hours, adding more pressure to Bitcoin. Hayes believes this will continue during US trading hours, adding more pressure to the price of Bitcoin.
Bitcoin can drop to $70,000
Hayes predicts that such sales could reduce Bitcoin to $70,000. When hedge funds exit in large quantities, it creates a ripple effect – more sales lead to lower prices, which forces other funds to do the same, making the decline worse.
According to Markus Thielen 10 times studymost of the demand for Bitcoin ETFs comes from hedge funds, not long-term investors. Now that these funds are withdrawing, the price of Bitcoin reacts to the sudden lack of demand. If the futures premium drops further, more funds may be forced to sell their ETF shares and buy back short-term futures, making Bitcoin lower.
Bitcoin is at the turning point
Bitcoin soared $100,000 after Trump’s election victory fueled hopes for Bitcoin’s strategic reserves. But Bitcoin is working to stay strong as ETF investors leave and hedge funds exit transactions. Hayes’ warning for Bitcoin dropped to $70,000 if new buyers don’t step in, which could become a reality. Currently, the market is providing rooting for new ETFs to bring new capital into the system and thus recover from the Tang market. Although the SEC shows interest in ETFs, the next ETF batch is ready to enter the market.
