Crypto Market Loses $40B as Bitcoin, Ethereum Struggle to Recover – Here’s Why

The cryptocurrency market is taking another hit, with its total market cap dropping by 2% and wiping out $40 billion in just 24 hours. Bitcoin and Ethereum are struggling to gain momentum, and uncertainty is creeping in. At the same time, the Crypto Fear & Greed Index sits at 40, signaling a neutral stance – but for how long?

With ETF outflows mounting, major hacks shaking investor confidence, and Bitcoin slipping further in February, traders are left wondering: is the worst yet to come?

Let’s break down what’s happening.

Bitcoin and Ethereum ETFs See Major Outflows

One of the biggest reasons for the market decline is the continued outflow from Bitcoin and Ethereum ETFs. Over the past two weeks, U.S. spot Bitcoin ETFs have seen net outflows of $1.14 billion – the largest since their launch.

Last week alone, Bitcoin ETFs recorded $571 million in withdrawals. Concerns over trade tariffs, inflation, and potential changes in monetary policy have fueled this sell-off. Fidelity led the outflows, followed by Grayscale and Bitwise, increasing uncertainty in the market.

Ethereum ETFs have also faced heavy selling pressure. In the past two weeks, they have lost a total of $85.3 million, with Grayscale accounting for the largest share. This has further weighed down Ethereum’s price.

Major Hacks Add Selling Pressure

The recent wave of major crypto hacks has worsened the market sentiment. The Bybit hack resulted in a $1.4 billion loss in Ethereum, triggering panic selling.

Although Bybit’s CEO, Ben Zhou, confirmed the recovery of $742 million, investor confidence remains shaky. Adding to the concerns, the neobank Infini was hit by a $49.5 million hack involving USDC, further unsettling the market.

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Will February End in the Red?

Historically, February has been a strong month for Bitcoin, with most years bringing positive returns except for 2014 and 2020. However, this time, Bitcoin is already down 6.41% for the month.

Analysts believe that BTC needs to close above $102,500 to turn February into a green month. If Bitcoin fails to reach this level, it could mark only the third negative February in its history.

Currently, Bitcoin is fluctuating between $93,000 and $100,000. If it fails to hold support at $93,000, it could drop further to $90,000.

Ethereum Faces Challenges as Competition Rises

Ethereum is also struggling, currently trading around $2,706 after a 2.2% decline. Historically, Ethereum has performed well in the first quarter of every fourth year, with strong gains in Q1 2017 and Q1 2021.

Despite being down 17% this year, some analysts still see potential for growth by the end of the quarter. However, competition from blockchains like Solana and Cardano remains a challenge.

Bitcoin and Ethereum are at a crossroads, battling market pressures and investor jitters. The next few weeks could set the tone for what’s to come.

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