Bitcoin Drops 3% to $78,100 as US Spot ETFs See $740M Outflows

Bitcoin's price has dipped below $80,000, prompting a market check-in to assess the current state of the cryptocurrency. As of 2:10 pm ET, the price of BTC stood at $78,100, reflecting a 3% drop over the past 24 hours. This decline has been accompanied by significant outflows from US spot bitcoin ETFs, with investors withdrawing $740 million from March 3-7, marking the fourth consecutive week of net outflows.

The price dip can be partially attributed to the lack of new information from Friday’s crypto summit, which failed to provide fresh insights or developments to drive the market. Joel Kruger of LMAX Digital suggested that the current market weakness is more about a sell-the-news effect and an overdue technical correction rather than any fundamental issues. However, the broader economic uncertainty, particularly concerns about the US economy's outlook, has also contributed to a risk-off sentiment among investors.

Ruslan Lienkha, the markets chief at YouHodler, pointed out that last year's market dynamics showed that bitcoin's consolidation phase can last several months before the next upward move. However, the current market environment presents more complexities, with pessimism prevailing in the US stock market and growing concerns about a potential recession. These factors could extend the consolidation phase into a medium-term bearish market.

Donald Trump's comments about a "period of transition" when asked about a possible recession further highlight the economic uncertainties. The S&P 500 and Nasdaq Composite indexes were down 2.8% and 4.3% on the day, respectively, as of 2:10 pm ET, reflecting the broader market sentiment.

Despite the current challenges, Kruger believes that bitcoin is getting closer to finding a bottom before a recovery in Q2. He noted that the asset should be exceptionally well-supported at the previous resistance area between $69,000 to $74,000. Kruger previously argued that BTC's store-of-value narrative could help it break away from misleading correlations to traditional risk assets. However, Lienkha cautioned that while bitcoin has the potential to evolve into a hedging asset in the future, it is currently perceived as a high-risk asset, often reacting more strongly to broader market sentiment than traditional financial markets.

As the market continues