Bitcoin Price Drops Below Key Pattern Amid Low Trading Activity

Bitcoin’s price has fallen below a key pattern, sparking concerns of a deeper decline. The cryptocurrency broke out of an ascending broadening wedge, a typically bearish pattern, with a 6.78% drop that pushed its price down to $87,630.

Analysts Warn of Further Declines

Matrixport analysts have warned that the slippage could lead to further declines, especially with low trading activity limiting demand for dip-buying. Markus Thielen, an independent analyst, notes that “the likelihood of a deeper decline is increasing, particularly since this break is occurring during a period of low trading activity, which may result in limited demand to buy the dip.”

While the analysts expect Bitcoin prices to rise later in the year, the current technical breakdown makes them “more cautious.” The pattern break isn’t just affecting Bitcoin, as Ethereum has also fallen below its key $2,600 to $2,800 support range, dropping to $2,375, further signaling weakness in the market.

Ethereum’s Price Drop

Analysts at Spot On Chain have warned that Ethereum “could be heading for its worst February if it drops below $2,400.” Historically, February has been bullish for Ethereum, with only one red month in 2018. However, with a 23% drop already, this could be another exception. Macroeconomic uncertainty, including new tariffs, adds to the pressure.

Outflows from US Spot Bitcoin ETFs

U.S. spot Bitcoin exchange-traded funds have experienced their second consecutive week of over $500 million in outflows leading up to Feb. 21. The majority of outflows came from Grayscale’s GBTC, which saw $60.08 million exit the fund as it continued its outflow streak following its conversion from a trust structure.

Bitwise’s BITB and Fidelity’s FBTC also contributed to the negative momentum, with outflows of $16.58 million and $12.47 million, respectively. These outflows suggest a decrease in investor confidence in the market.

Key Takeaways:

  • Bitcoin’s price has fallen below a key pattern, sparking concerns of a deeper decline.
  • Ethereum has also fallen below its key support range, dropping to $2,375.
  • US spot Bitcoin ETFs have experienced significant outflows, totaling over $500 million.
  • Analysts expect Bitcoin prices to rise later in the year, but the current technical breakdown makes them more cautious.

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