Bitcoin Plunges to $86K, Erasing $1B in Market Cap

Bitcoin's price plummeted to $86,099 on February 26th, erasing nearly $1.06 billion from the cryptocurrency market capitalization and sending shockwaves through the industry. According to Coinglass data, approximately 230,000 positions were liquidated on the day. This significant price drop is a clear indication of bearish sentiment, as the digital asset's open interest dipped to 5%. On-chain data also suggests that exchange inflows surged to 14.2%, potentially signaling panic selling among holders. Furthermore, funding rates have entered negative territory, reflecting investors' shifting sentiments.

As the world's leading digital asset, Bitcoin's price action below $90k resulted in massive losses for holders. Thousands of positions were liquidated, and strong withdrawals from spot Bitcoin ETF funds were recorded. According to multiple reports, the five-day outflow for ETFs amounted to $1.1 billion, with $516 million lost on February 24th. InTheBlock noted that around 12% of all BTC addresses are now in the red, marking the highest unrealized loss percentage for Bitcoin since October 2024.

Crypto-related stocks also suffered from Bitcoin's recent drop. Michael Saylor's Strategy, with a portfolio worth over $43 billion including 499,096 Bitcoin, saw its stock price drop 11% in the past 24 hours. Other crypto-related stocks, such as Robinhood (HOOD), Coinbase (COIN), Marathon Digital (MARA), and Bitdeer (BTDR), also experienced significant declines.

Bitcoin's underperformance was not limited to the crypto market. Traditional financial markets also felt the impact, with the Nasdaq Composite dropping by 2.8% and the S&P 500 surrendering 2.1% of its market cap. The sudden strength of the US Dollar Index suggests that many investors are seeking safety havens for their investments. On-chain data indicates a recent surge in crypto whale activities, with Bitcoin whales selling over $1.2 billion worth of digital assets.

Analysts attribute Bitcoin's decline to macroeconomic conditions, such as US President Donald Trump's tariff announcement and geopolitical tensions between China and the United States. These factors have pushed some investors to reevaluate