Bitcoin's Volatile Plunge Sparks Debate on Market Bottom

Bitcoin's future remains a topic of debate among analysts as the cryptocurrency navigates a volatile market landscape. Recent losses have sparked discussions about whether these declines signal a deeper downturn or a path to recovery.

The crypto market is currently experiencing extreme fear, as reflected by dramatic sell-offs totaling $1.7 billion. Some analysts suggest that this could mark a significant market bottom, while others remain cautious. Julio Moreno from CryptoQuant warned that Bitcoin has experienced one of the largest single-day losses in months, with traders bracing for critical price action.

Market analyst Miles Deutscher highlighted that the Crypto Fear and Greed Index has plunged to its lowest level since October 2024. He believes that extreme fear in the market could be a precursor to a price reversal, indicating that Bitcoin might be approaching a critical turning point. However, he also pointed out that BTC exchange inflows hit their highest level of the year amid the recent market turmoil, suggesting that traders rushed to liquidate their holdings as Bitcoin dipped below the $90,000 mark.

Mark Cullen, an analyst at AlphaBTC, weighed in on the situation, highlighting the role of market makers in stabilizing the price. According to Cullen, a Binance exchange market maker stepped in to prevent a deeper crash, recognizing that a further decline could trigger a widespread capitulation event. Despite the intervention, Cullen remains cautious, suggesting that a temporary bounce may occur before the next leg down.

Some analysts are eyeing March 2025 for a potential bullish turn. Colin Talks Crypto, a well-known crypto analyst, pointed to the strong correlation between Bitcoin's price movements and the global M2 money supply. His model suggests that Bitcoin is expected to see a significant upward move around March 7, 2025, though this timeline could shift earlier based on recent trends.

However, volatility remains the dominant theme in the short term, and traders should brace for potential bounces as macroeconomic factors influence institutional sentiment. Maria Carola, CEO of StealthEx, shared that the price needs to recover above $96,000-$100,000 to confirm the market's readiness for new growth. Adding to the bearish pressure, Bitcoin ETFs have recorded substantial net outflows, with institutional investors pulling funds out of the market, raising concerns about further downside risk.

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