Bitcoin Plunges $10K in Two Days: ETF Sell-Off Sparks Market Panic

Wall Street has witnessed a record sell-off of Bitcoin (BTC) through exchange-traded funds (ETFs) in recent days, leading to speculation about whether the cryptocurrency has reached its bottom. BTC's price has plummeted by approximately $10,000 in just two days, reaching its lowest level since the Trump re-election rally began in early November.

Financial institutions operating spot BTC ETFs have been offloading the cryptocurrency at an unprecedented pace. On February 25 alone, nearly $940 million worth of BTC was sold, with Fidelity Wise Origin Bitcoin Fund (FBTC) being the biggest seller, offloading more than 3,770 BTC worth almost $345 million. Even VanEck Bitcoin (HODL), the smallest seller by volume on the same day, sold 109,000 Bitcoins worth $10 million.

Despite the massive sell-off, some investors remain hopeful that the extensive pressure will quickly send BTC into 'oversold' territory, leading to a rebound. On February 25, BTC briefly whipsawed after falling below $88,000, giving hope that the bloodbath that wiped more than $300 billion from the digital assets' total market capitalization was at an end. However, BTC has so far failed to reclaim the $89,000 level.

While some investors, such as Cas Abbé, have pointed out that BTC is relatively quick to find a local bottom after major ETF sell-offs, history shows that this is not always the case. For example, protracted periods of outflows in late April 2024 and mid-June 2024 led to significant price drops, with BTC falling below key support levels before eventually recovering.

Despite the dire situation in the cryptocurrency market, some silver lining may remain for more bullish investors. Finbold reported on Tuesday that it is highly unlikely that Bitcoin will plunge below $83,000 during the current downturn, as there is a strong indication that it remains in global consolidation in the weekly and daily timeframes. However, both historical examples and technical analysis suggest that BTC might struggle with regaining bullish momentum in the short term.

At press time, Bitcoin remains significantly below the $8