The cryptocurrency market has undergone a sharp correction that led to Bitcoin dropping to key support levels. This decline was not random but resulted from the convergence of three main pressures: technical, institutional, and economic.
1. Technical Trigger: Liquidation Cascade
The immediate driver of the decline was the massive and forced liquidation of highly leveraged long positions. As the price began to slide, platforms were forced to sell to cover losses, creating a cascading effect that accelerated the drop, confirming the weakness of immediate liquidity in the market.
2. Institutional Shift: Exit of ETF Funds
In parallel with the activities of speculators, spot Bitcoin ETFs recorded significant net outflows. This decline in demand for "smart money" indicated a decrease in short-term institutional appetite, exacerbating uncertainty among investors.
3. Macroeconomic Pressures and General Sentiment
Global economic concerns, such as trade tensions or news of government actions (like Bitcoin seizures), contributed to increased pressure on high-risk assets. This combination of pressures led to a rapid shift in the Fear & Greed Index toward the "extreme fear" zone, fueling a panic-driven sell-off.
