Bitcoin Plunges Amid Extreme Fear, $1B ETF Outflows

Investor sentiment has reached a level of extreme fear not seen since the collapse of FTX, as Bitcoin struggles to maintain its position above $85,000. On February 26, investor sentiment dropped below the levels seen in the aftermath of the FTX implosion, with the crypto fear and greed index plummeting to a 3-year low of 10, indicating extreme fear.

The risk-off sentiment has led to significant outflows from Bitcoin ETFs, with investors withdrawing over $1 billion on Wednesday alone, bringing weekly outflows to $1.8 billion. This trend has been accelerated by concerns over inflation and President Trump's recent tariff announcements, which have sparked fears of stagflation and weakened consumer sentiment.

Analysts have expressed mixed views on Bitcoin's next price direction. While some, like Ken Teng, believe that the extreme fear in the market signals a potential bottom and that Bitcoin could bounce higher, others, such as QCP Capital, caution that a stubborn inflation could dent the Fed rate cut outlook and that Friday's PCE inflation print could offer more clues about Bitcoin's direction.

At the time of writing, Bitcoin has bounced 5% from its $82,200 lows and is valued at $86,500. However, it remains to be seen whether the king coin will reclaim range-lows above $90,000 and reverse recent losses or dig deeper to the confluence area of the CME gap and weekly moving average at $77,000-$78,000, as speculated by BTC trader Cryp Nuevo.