Bitcoin Slides Below $80K as ETF Outflows and Fed Policy Weigh on Markets
Bitcoin slipped under the $80,000 mark late Thursday, deepening its retreat to 27% from its record peak of $109,000 in January. The drop has pushed the leading cryptocurrency below its 200-day moving average, a key technical level that traders use to gauge long-term momentum.
The downturn coincides with accelerating outflows from Bitcoin ETFs, which had been a major driver of its previous surge. Investors have withdrawn over $2 billion from spot Bitcoin ETFs throughout February, marking the largest outflow period since these funds launched. In contrast, gold ETFs have seen a rise in inflows, suggesting a shift toward traditional safe-haven assets as macroeconomic uncertainty grows.
Despite the selloff, Bitcoin’s decline remains relatively moderate compared to previous market cycles. Historically, Bitcoin has endured at least 16 major pullbacks from all-time highs, with losses spanning from 30% to as much as 85% before staging recoveries. The current drop echoes a 33% correction seen between March and August 2024, which took nearly five months to reclaim its prior highs. Deeper corrections, like the 78% crash from 2021 to 2022 or the 84% plunge in 2018, required much longer periods for recovery.
One of the key factors pressuring Bitcoin is shifting expectations around Federal Reserve policy. Persistent inflation data has lowered the odds of imminent interest rate cuts, dampening sentiment for risk assets like Bitcoin. The cryptocurrency had previously rallied in late 2024 on speculation of a more accommodative monetary stance, but with rates remaining elevated, momentum has stalled.
Adding to the unease, global markets have been rattled by fresh geopolitical tensions following the Trump administration’s recent tariff measures against China, Mexico, and Canada. A strengthening U.S. dollar and declining Treasury yields have further weighed on Bitcoin’s price action.
Security concerns have also played a role in the selloff. A staggering $1.4 billion security breach on Bybit last week—the largest crypto heist in history—has raised alarms over digital asset safety. Analysts suggest this event may have triggered additional selling pressure, particularly among newer investors.
However, long-term Bitcoin holders appear largely unfazed. On-chain data shows that most of the selling is coming from short-term traders, while long-term wallets remain mostly inactive.
Looking ahead, Bitcoin’s path remains uncertain. Historical patterns suggest that corrections of this magnitude can take anywhere from weeks to over a year to resolve, depending on macroeconomic factors and market sentiment. Traders are closely monitoring support levels around $75,000 and ETF flows for any signs of renewed buying interest.