Why Bitcoin Price is Down Today? The Truth Behind the Brutal $770B Crypto Crash

The post Why Bitcoin Price is Down Today? The Truth Behind the Brutal $770B Crypto Crash appeared first on Coinpedia Fintech News

The crypto market is experiencing a blood bath, with over $500 billion erased in just a week. The total market cap has plunged to $2.8 trillion, while Bitcoin has crashed to a four-month low of $82,300, falling nearly 15% in just seven days. The sudden drop has triggered a wave of liquidations, wiping out a staggering $770 billion in just 24 hours.

Fear is spreading fast, and investors are on edge. The Crypto Fear & Greed Index has plunged to 20, signaling “extreme fear.”

What’s causing the chaos? Let’s break it down.

AI Stock Surge Diverts Investor Interest

A key reason behind Bitcoin’s drop is the growing investor focus on AI stocks, especially NVIDIA. The chipmaker reported a strong Q4 revenue of $39.3 billion, a 12% increase from the previous quarter and a massive 78% rise year-over-year.

This impressive performance pushed NVIDIA’s stock up by 4%, adding over $125 billion to its market cap. As a result, investors have been shifting funds from Bitcoin into high-growth AI stocks, causing Bitcoin to lose momentum.

Bitcoin ETF Outflows Add More Pressure

Bitcoin is also struggling due to continuous outflows from Bitcoin exchange-traded funds (ETFs). Data from Farside shows that between February 24 and February 26, Bitcoin ETFs saw $2.43 billion in outflows.

This marks the seventh straight day of withdrawals, with no sign of slowing down. Major institutions like Fidelity have led the sell-off, adding more pressure to the market.

$5 Billion in Bitcoin Options Set to Expire

Further selling pressure is expected as $5 billion worth of Bitcoin options contracts are set to expire on February 28. A large number of these contracts were placed at higher strike prices, making them unlikely to be profitable.

According to Deribit, about 78% of these contracts—worth $3.9 billion—will expire worthless. Meanwhile, $1.3 billion in Bitcoin has been moved to exchanges, increasing the risk of more selling.

Key Levels to Watch

Bitcoin is currently trading at around $85,534, down 4% in the past 24 hours. The key support level to watch is $83,000—if Bitcoin falls below this, it could drop further to $80,313. However, if it holds above this level, a rebound is possible.

The Relative Strength Index (RSI) has fallen to 25.92, indicating extreme oversold conditions. Historically, Bitcoin has seen short-term price bounces when the RSI drops below 30.

Bitcoin has been here before—oversold, undervalued, and doubted. The question is, how long before the tides turn?