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Why Bitcoin Price is Down Today? The Truth Behind the Brutal $770B Crypto Crash

Published by
Mustafa Mulla

The crypto market is experiencing a blood bath, with over $500 billion erased in just a week. The total market cap has plunged to $2.8 trillion, while Bitcoin has crashed to a four-month low of $82,300, falling nearly 15% in just seven days. The sudden drop has triggered a wave of liquidations, wiping out a staggering $770 billion in just 24 hours.

Fear is spreading fast, and investors are on edge. The Crypto Fear & Greed Index has plunged to 20, signaling “extreme fear.”

What’s causing the chaos? Let’s break it down.

AI Stock Surge Diverts Investor Interest

A key reason behind Bitcoin’s drop is the growing investor focus on AI stocks, especially NVIDIA. The chipmaker reported a strong Q4 revenue of $39.3 billion, a 12% increase from the previous quarter and a massive 78% rise year-over-year.

This impressive performance pushed NVIDIA’s stock up by 4%, adding over $125 billion to its market cap. As a result, investors have been shifting funds from Bitcoin into high-growth AI stocks, causing Bitcoin to lose momentum.

Bitcoin ETF Outflows Add More Pressure

Bitcoin is also struggling due to continuous outflows from Bitcoin exchange-traded funds (ETFs). Data from Farside shows that between February 24 and February 26, Bitcoin ETFs saw $2.43 billion in outflows.

This marks the seventh straight day of withdrawals, with no sign of slowing down. Major institutions like Fidelity have led the sell-off, adding more pressure to the market.

$5 Billion in Bitcoin Options Set to Expire

Further selling pressure is expected as $5 billion worth of Bitcoin options contracts are set to expire on February 28. A large number of these contracts were placed at higher strike prices, making them unlikely to be profitable.

According to Deribit, about 78% of these contracts—worth $3.9 billion—will expire worthless. Meanwhile, $1.3 billion in Bitcoin has been moved to exchanges, increasing the risk of more selling.

Key Levels to Watch

Bitcoin is currently trading at around $85,534, down 4% in the past 24 hours. The key support level to watch is $83,000—if Bitcoin falls below this, it could drop further to $80,313. However, if it holds above this level, a rebound is possible.

The Relative Strength Index (RSI) has fallen to 25.92, indicating extreme oversold conditions. Historically, Bitcoin has seen short-term price bounces when the RSI drops below 30.

Bitcoin has been here before—oversold, undervalued, and doubted. The question is, how long before the tides turn?

FAQs

How much has Bitcoin dropped this week?

Bitcoin has dropped nearly 15% in seven days, hitting a four-month low of $82,300 as sell pressure intensifies.

What is causing the crypto market crash?

Crypto is crashing due to $500B wiped out, Bitcoin ETF outflows, AI stock rally, and massive liquidations triggering extreme fear.

Will Bitcoin recover from this crash?

Bitcoin may rebound if key support at $83,000 holds, but further drops to $80,313 are possible if selling pressure continues.

Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.

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