Catenaa, Thursday, February 27, 2025-Bitcoin extended its decline Wednesday night, falling 4.1% to a low of $83,600, its weakest level since November 2024, before rebounding slightly to $84,738.
Analysts point to the unwinding of basis trades and record ETF outflows as key drivers behind the slump.
Ether also declined 5.2% to $2,360, while major altcoins XRP, BNB, and Solana saw losses.
Peter Chung, head of research at Presto Research, said institutional closures of basis trades contributed to the sell-off, citing $1 billion in U.S. spot bitcoin ETF outflows the previous day. He pointed to CME’s annualized basis and TradFi funding rates as indicators to watch, adding that no signs of a rebound are visible yet.
Another potential factor, weak macroeconomic data, has begun affecting crypto sentiment. Chris Yu, CEO of SignalPlus, noted that falling implied bitcoin volatility alongside declining prices signals speculators exiting the market. He also warned of increased scrutiny on MicroStrategy (MSTR) following its aggressive bitcoin accumulation.
The decline comes after months of bullish sentiment sparked by Donald Trump’s election victory, which fueled speculation about a more crypto-friendly regulatory environment. However, analysts caution that concrete policy shifts could take time to materialize.
