Bitcoin Drops Below $85K Amid Panic Selling, ETF Outflows Soar

Bitcoin’s price plunged to as low as $83,330 late Wednesday, extending its downward trajectory as panic selling gripped the crypto market. The world’s largest cryptocurrency remains under pressure from macroeconomic factors, including ongoing tariff wars.

The Fear & Greed Index plunged to 10, signaling extreme fear among traders—a level not seen since June 2022.

If you're panic selling now, you're probably a noob.

A 30% correction in a #Bitcoin bull cycle is common—it dropped 53% in 2021 and still recovered to an ATH.

Buying when prices rise and selling when they fall is the worst investment strategy. Invest with a clear plan. pic.twitter.com/eYwW1VXd8C

— Ki Young Ju (@ki_young_ju) February 27, 2025

Bitcoin ETF Outflows Soar

The sharp decline follows a wave of institutional sell-offs, particularly in U.S. spot Bitcoin exchange-traded funds (ETFs), which saw record outflows of $1.136 billion on Tuesday and an additional $757 million on Wednesday. BlackRock’s spot Bitcoin ETF (IBIT) saw a record outflow of 5,000 BTC on Feb. 26, surpassing the $332 million withdrawal recorded on Jan. 2.

The aggressive unwinding of basis trades—where investors profit from price gaps between spot and futures markets—has amplified the downturn, driving Bitcoin to its lowest level since November 2024. The short term predictions for Bitcoin are also not positive.

Ether followed suit, dropping over 5% to $2,300, while major altcoins like Solana (SOL), Binance Coin (BNB), and XRP also registered losses. The broader crypto market capitalization tumbled 5% in 24 hours, sinking to $2.88 trillion, according to Coingecko.

2/26 Bitcoin ETF Total Net Flow: -$757.03 million
(2nd largest daily outflow of Bitcoin Spot ETFs, trailing only yesterday, which recorded the highest outflow.)$IBIT (BlackRock): -$420.56 million$FBTC (Fidelity): -$145.69 million$BITB (Bitwise): -$13.65 million$ARKB (Ark… https://t.co/h96gbRLW8N pic.twitter.com/YX1G9rFmq8

— Trader T (@thepfund) February 27, 2025

Bitcoin Sell-off Triggers Massive Liquidations

The downturn has triggered a cascade of liquidations, with over 185,186 leveraged traders wiped out in the last 24 hours. Total liquidations exceeded $768. million, with Bitcoin accounting for $461 million and Ether contributing $127 million, as per Coinglass data. The selloff has also impacted high-risk altcoins, with Solana, Lido, and Sonic suffering 5–6% losses.

Despite optimism earlier this year surrounding pro-crypto policies under the new U.S. administration, market sentiment has shifted amid weak macroeconomic data. Falling Bitcoin volatility alongside declining prices suggests that speculators are losing confidence in near-term gains.

Chief Analyst at Bitget Research, Ryan Lee noted:

The $3–5 billion in leveraged liquidations suggests market corrections may eliminate overleveraged positions, potentially creating a rebound opportunity if trade tensions de-escalate. For now, crypto remains tightly correlated with macroeconomic uncertainty, balancing bearish trade risks against structural bullish drivers like institutional adoption.