| Key Points: – Bitcoin ETFs saw outflows, pressuring prices amid broader risk-off mood. – Leverage unwinds triggered forced liquidations, accelerating the crypto market drop. – Risk assets weakened broadly; crypto fell sharply on February 28. |
Crypto assets fell sharply on Feb. 28 as risk assets weakened broadly. The drawdown aligned with three overlapping forces: Bitcoin ETF outflows, leverage-driven forced liquidations, and a wider risk-off sentiment.
As reported by Sunday Guardian Live, U.S. equities dropped on a hot PPI inflation print while Iran-related tensions and AI job-loss concerns added to risk aversion. Cross-asset stress often tightens crypto liquidity and amplifies downside moves when volatility spikes.
ETF flows and iShares Bitcoin Trust (IBIT)
Based on data reported by MarketWatch, U.S. spot Bitcoin ETFs have seen roughly $2.6 billion in net outflows year to date, signaling institutional de-risking. Redemptions from products such as iShares Bitcoin Trust (IBIT) translate into selling pressure on the underlying asset.
Mechanically, authorized participants source or unwind Bitcoin to meet creations and redemptions, so persistent outflows drain liquidity. That dynamic can interact with thin order books to accelerate intraday swings.
According to Forbes, Bitcoin suddenly plunged toward $60,000 and dropped almost 5% within minutes during the session. As CCN explains, breaks below key levels can trigger forced liquidations that compound downside pressure in a leveraged market.
Some strategists see signs of capitulation rather than a structural break. “The AI-stock ‘bloodbath’ and crypto selloff are almost over,” said Tom Lee, Managing Partner at Fundstrat.
What to watch next for crypto after today’s drop
Flows and market-structure signals to monitor
Watch daily spot-ETF net flows for stabilization or reversals across IBIT and peers. A shift back to steady inflows would indicate improved two-way liquidity and less redemption-induced selling.
Monitor open interest, funding rates, and liquidation tallies during volatility spikes. Elevated leverage and thin off-hours liquidity can intensify swings and widen spreads.
Macro signals: Fed policy, inflation prints, geopolitics
As reported by Barron’s citing Deutsche Bank strategists, uncertainty around AI investment and its labor-market impact has weighed on risk assets correlated with crypto. The path of U.S. interest rates remains pivotal for valuations across technology and digital assets.
Upcoming inflation prints and communications from the U.S. Federal Reserve may recalibrate rate-cut expectations. Geopolitical developments tied to Iran remain a potential volatility source for broader markets.
Disclaimer:
The information provided on AiCryptoCore.com is for educational and informational purposes only and does not constitute financial, investment, or trading advice. Cryptocurrency investments involve risk and may result in financial loss. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
