Bitcoin Drops 14% to $77,800 as Institutional Outflows Surge

Bitcoin has experienced a significant drop, falling below $80,000 for the first time in four months. This decline marks a 14% decrease in value over the past week, with the leading cryptocurrency currently trading at $77,800. Ethereum has also seen a downturn, falling to $1,860, its lowest point since November 2023. This market correction is driven by a surge in extreme fear among investors, as indicated by the Crypto Fear & Greed Index, which has plummeted to 17 from a high of 92+ last year. This shift reflects a broad market correction fueled by significant capital outflows from digital assets.

In the past four hours, total liquidations have surpassed $195 million, with long positions accounting for $161 million. This sell-off suggests that traders were caught off guard, leading to forced liquidations and accelerating Bitcoin’s decline. Institutional investors have been offloading digital assets for four consecutive weeks, with the week ending March 7 seeing $876 million in outflows from digital asset investment products. This brings the four-week total to $4.75 billion, slashing year-to-date inflows to just $2.6 billion. Bitcoin bore the brunt of these outflows, losing $756 million. Total assets under management across digital funds have now dropped by $39 billion from their peak, sitting at $142 billion—the lowest since mid-November 2024.

Policy moves have intensified selling pressure. New tariffs on Canada, Mexico, China, and potentially the EU have driven institutional investors away from risk assets like crypto. Additionally, remarks at the White House Crypto Summit triggered further uncertainty. The government confirmed plans for a US Bitcoin Reserve, stating that it will use seized BTC but will not make additional purchases. This dampened market confidence, leading to further sell-offs.

Market experts have mixed opinions on Bitcoin’s next move. Former BitMEX CEO Arthur Hayes expects Bitcoin to drop to $70,000 before a renewed bullish cycle begins. He noted that if Bitcoin fails to retest $78,000, $75,000 is next in the crosshairs, with significant options open interest between $70,000 to $75,000. Meanwhile, MicroStrategy