Key Points
- Bitcoin (BTC) experiences a significant drop, breaking out of a typically bearish pattern, leading to concerns of further decline.
- Ethereum (ETH) also falls below its key support range, indicating market weakness.
Bitcoin (BTC) has broken out of an ascending broadening wedge, a typically bearish pattern. This resulted in a 6.78% drop, pushing its price down to $87,630.
Analysts at Matrixport, in a post on Feb. 25, warned that this drop could lead to further declines. They noted that low trading activity might limit demand for buying during this dip.
Market Analysis
Analysts expect Bitcoin prices to rise later in the year. However, the current technical breakdown is making them more cautious.
This pattern break is not only affecting Bitcoin. Ethereum (ETH) has also fallen below its key $2,600 to $2,800 support range. It dropped to $2,375, further indicating market weakness.
Analysts at Spot On Chain warned in a post on Feb. 25 that Ethereum could be heading for its worst February if it drops below $2,400. They said, “Historically, February has been bullish for ETH, with only one red month in 2018. But with a 23% drop already, this could be another exception. Macroeconomic uncertainty, including new tariffs from the Trump administration, adds to the pressure.”
Crypto Market Trends
U.S. spot Bitcoin exchange-traded funds have experienced their second consecutive week of over $500 million in outflows leading up to Feb. 21.
The majority of outflows came from Grayscale’s GBTC, which saw $60.08 million exit the fund as it continued its outflow streak following its conversion from a trust structure. Bitwise’s BITB and Fidelity’s FBTC also contributed to the negative momentum, with outflows of $16.58 million and $12.47 million, respectively.