TLDR
Bitcoin has fallen 12.6% in three days, marking the largest decline since the FTX crash in 2022
BitMEX co-founder Arthur Hayes predicts potential further drop to $70,000-$75,000 range
Critical support zone identified between $76,000 and $65,000
Trump’s budget decisions and debt ceiling policy could trigger further market decline
Current price stands at $86,227 with sentiment affected by lack of promised crypto initiatives
Bitcoin’s price has recorded its most substantial three-day decline since the FTX collapse in 2022, dropping 12.6% to settle at $86,227. The downturn has sparked renewed discussion about market stability and potential support levels among industry analysts.
The cryptocurrency market has shown increased volatility in recent trading sessions, with Bitcoin’s price movement catching the attention of veteran market observers. Arthur Hayes, co-founder of BitMEX, has shared analysis suggesting the possibility of further price declines, with targets between $70,000 and $75,000.
Market data indicates a cooling phase has begun, characterized by a retracement toward pre-election liquidity levels. Trading volumes have increased during this period, suggesting active market participation during the price adjustment.
Technical Analysis
Technical analysis from Hayes identifies a critical demand zone between $76,000 and $65,000, which could serve as a strong support area. This range has historically shown buying interest and could potentially halt further price declines.
The current market dynamics appear closely tied to macroeconomic factors, particularly those related to U.S. fiscal policy. Hayes points to upcoming budget decisions and debt ceiling negotiations as potential catalysts for market movement.
Now we chill out, retrace, and wait. If Trump can’t pass his budget which spends more and hikes debt ceiling, resume capitulation to levels pre the election day victory $75k to $70k. This is test of how strong Trump’s hold is on the Republican party. pic.twitter.com/sFUq12OSIY
— Arthur Hayes (@CryptoHayes) February 25, 2025
Trading data from multiple exchanges shows increased selling pressure across spot and derivatives markets. The volume profile indicates a shift in market sentiment, with some traders taking profits from recent rallies.
Pre-election expectations had included potential crypto-friendly policies, including the creation of a national Bitcoin Reserve. The lack of immediate action on these initiatives has contributed to current market uncertainty.
Market analysts note that the recent price movement represents a natural cooling period following the strong rally that occurred after U.S. election results. Trading patterns suggest institutional investors are reassessing their positions.
Data from MetaEra highlights that the current decline ranks as the most substantial three-day drop in Bitcoin’s price since November 2022. This metric has drawn attention from market participants who compare current conditions to previous market cycles.
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Bitcoin’s prolonged range play above $90K has concluded bearishly this week, and how?
The 12.6% drop observed in the first three days of the week (per UTC hours) marks the largest decline since the FTX… pic.twitter.com/SENUfy8S2V
— MetaEra (@MetaEraHK) February 27, 2025
Short-term price action shows consolidation around the $86,000 level, with technical indicators suggesting oversold conditions on lower timeframes. Trading volume has remained elevated throughout the price decline.
On-chain metrics indicate that long-term holders have largely maintained their positions during this downturn. Wallet analysis shows minimal movement from addresses that have held Bitcoin for more than one year.
Exchange flow data reveals increased inflows during the initial stages of the price decline, suggesting some traders moved to secure profits. However, outflow numbers have begun to stabilize, indicating potential accumulation at current levels.
Derivatives markets have shown increased activity, with options open interest reaching new highs for the year. Put/call ratios suggest traders are hedging positions while maintaining overall bullish sentiment for longer timeframes.
Market structure analysis indicates that despite the recent decline, Bitcoin maintains its position above key moving averages on higher timeframes. Technical support levels have formed around previous resistance zones.
The most recent trading data shows Bitcoin holding at $86,227, with 24-hour trading volume exceeding $45 billion across major exchanges. Market depth metrics indicate strong bid support at current levels.
