The post Why Crypto Market Is Dropping, Nearly $40 Billion Wiped Out: Will BTC & ETH Recover? appeared first on Coinpedia Fintech News
The cryptocurrency market is facing another decline, with its total market cap dropping by 2%, wiping out $40 billion in the past 24 hours. This decline has kept major cryptocurrencies like Bitcoin and Ethereum struggling to gain momentum. Meanwhile, the crypto fead & greed index is standing at 40 reflecting a neutral stance in the market. So, what is causing this latest drop?
Bitcoin & Ethereum ETFs See Massive Outflows
One of the key reasons behind the crypto market’s decline is the continuous outflow from Bitcoin and Ethereum ETFs. In the past two weeks, U.S. spot Bitcoin ETFs saw total net outflows of $1.14 billion, marking the largest withdrawal since their launch.
Last week alone, Bitcoin ETFs recorded $571 million in outflows, mainly due to concerns over trade tariffs, inflation, and possible changes in monetary policy. Fidelity led the outflows, followed by Grayscale and Bitwise, further increasing market uncertainty.
Ethereum ETFs have also faced significant withdrawals. Over the past two weeks, Ethereum ETF outflows have totaled $85.3 million, with Grayscale accounting for the largest outflow. This selling pressure has further impacted Ethereum’s price.
Major Hacks Add Selling Pressure
Another key reason for the market downturn is the recent series of major crypto hacks. The Bybit hack, which resulted in a loss of $1.4 billion worth of Ethereum, caused a major sell-off in the market.
While Bybit’s CEO, Ben Zhou, has confirmed the recovery of $742 million in stolen funds, investor confidence remains shaken.
Adding to the concerns, another hack targeted the neobank Infini, resulting in a $49.5 million theft in USDC.
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.
Bitcoin and Ethereum Price Movements
Bitcoin’s price has been moving sideways over the past few weeks, fluctuating between $93,000 and $100,000. If it fails to hold support at $93,000, it could drop further to $90,000.
Meanwhile, Ethereum is also struggling to maintain its momentum, currently priced at around $2,706, reflecting a 2.2% decline. Historically, Ethereum has performed well in the first quarter of every fourth year, with significant gains in Q1 2017 and Q1 2021.
Despite being down 17%, some experts believe Ethereum could still see strong growth by the end of the quarter. However, competition from platforms like Solana and Cardano remains a challenge.
