Bitcoin’s price took a dip to $86,099 on February 26th, leading to a significant wipeout of almost $1.06 billion from the crypto market cap and causing tremors throughout the crypto space. Data from Coinglass indicates that approximately 230,000 positions were liquidated on this single day.

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A bearish mood seems to have settled in, as seen by a 5% drop in Bitcoin’s open interest, suggesting investors and holders are reducing their leveraged positions. Adding to this, on-chain data reveals a spike in exchange inflows reaching 14.2%, hinting at potential panic selling among those holding Bitcoin. Furthermore, funding rates have now slipped into negative territory, reinforcing the shift in investor sentiment.

Massive Losses For Holders As BTC Tests $86K

As the leading cryptocurrency, Bitcoin’s recent negative price action sent shockwaves across the entire crypto industry. With Bitcoin’s price dipping below the $90,000 mark, a large number of trading positions were liquidated, and significant withdrawals from spot Bitcoin ETF funds were also observed. According to various reports, the outflow from ETFs over five days totaled a substantial $1.1 billion, with a striking $516 million exiting on February 24th alone.

In a recent post on Twitter/X, InTheBlock pointed out that around 12% of all Bitcoin addresses are currently experiencing losses. Their post further noted that this represents the highest percentage of unrealized losses for Bitcoin holders since October 2024.

With Bitcoin briefly dropping below $90k, roughly 12% of all Bitcoin addresses are holding at a loss.

🔴This is the highest unrealized loss percentage since October 2024 pic.twitter.com/pngLz4G4wc

— IntoTheBlock (@intotheblock) February 25, 2025

Crypto-Related Stocks Fall

Beyond individual crypto holders, stocks linked to the crypto world also felt the sting of Bitcoin’s recent price drop. Notably, Michael Saylor’s Strategy took a significant hit, with its stock price plummeting 11% in just the last day. The company’s stock has been on a downward trend since its peak in November and has now fallen by a substantial 55% from that high point.

Strategy possesses a considerable portfolio valued at over $43 billion, including a massive 499,096 Bitcoin. With Bitcoin’s price under pressure, some crypto market watchers are wondering if Strategy might consider selling off some of its Bitcoin holdings. However, certain experts have dismissed this idea, arguing that it’s unlikely a company so deeply invested in crypto would back away now.

Other crypto-related stocks also experienced declines. Robinhood (HOOD) saw an 8% decrease, Coinbase (COIN) wasn’t far behind with a 6.4% drop, while Marathon Digital (MARA) and Bitcoin miners Bitdeer (BTDR) experienced steeper falls of 9% and 29%, respectively.

Traditional Stocks Also Suffered

The ripple effect of Bitcoin’s poor performance extended beyond the crypto market, impacting traditional financial markets as well. The Nasdaq Composite experienced a 2.8% drop, and the S&P 500 also saw a significant decrease, surrendering 2.1% of its market capitalization. Market observers have also pointed to a sudden strengthening of the US Dollar Index, suggesting that a number of investors are seeking out “safe haven” assets for their funds amidst the market uncertainty.

Adding to the market turmoil, on-chain data indicates a recent surge in activity from large crypto holders, often called whales. Bitcoin whales have reportedly sold off over $1.2 billion worth of their digital assets recently.

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Market analysts suggest that these macroeconomic conditions are behind Bitcoin’s recent slide. The market is still reacting to the recent tariff announcement from US President Donald Trump, and ongoing geopolitical tensions between China and the United States are causing some investors to reconsider their long-term investment strategies.