Bitcoin (BTC) and the broader cryptocurrency market experienced intense volatility this week, initially surging after President Trump reaffirmed plans for a U.S. Crypto Reserve. However, the rally quickly lost steam, leading to another wave of liquidations and uncertainty.
After a prolonged period of selling pressure, BTC dropped to $78,000 last week. The announcement of the Crypto Reserve briefly ignited a relief rally, pushing BTC back to just under $95,000. However, the gains were short-lived, with BTC slipping again as open interest declined and funding rates turned mixed. Altcoins followed a similar pattern, initially spiking before retracing gains.
ETF Flows Turn Red Again
ETF flows reflected the market’s indecision. While Bitcoin spot ETFs recorded a net-positive inflow of $94.3 million on February 28, it wasn’t enough to reverse the broader trend of capital outflows. BlackRock’s IBIT continued to bleed funds, and Ethereum ETFs mirrored this pattern, with total inflows of $2.82 billion offset by significant withdrawals from Grayscale’s ETHE.
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Open interest data further signaled trader uncertainty. CME led with 155.74K BTC in OI, while Binance trailed with 109.17K BTC. Despite some hourly OI gains, the overall 24-hour change remained negative across most exchanges, suggesting that traders are reducing exposure amid choppy price action.
Funding rates painted a picture of conflicting sentiment. BTC’s rates fluctuated between positive and negative across exchanges, while Ethereum saw slightly more stable funding on OKX and dYdX. Solana and XRP showed increased funding rates, indicating heightened speculation but also a potential for further corrections.
Liquidation data highlighted the market’s fragility, with $669 million in liquidations over the past 24 hours. Bitcoin accounted for $222 million, followed by Ethereum at $134 million. A majority of these were long liquidations, particularly on Bybit and Binance.
Looking ahead, BTC needs to hold above $86,000 to regain bullish traction, while altcoins must stabilize to avoid further sell-offs. While Trump’s pro-crypto stance initially sparked optimism, traders remain cautious as regulatory clarity and institutional inflows will determine whether the market can sustain any meaningful upside in the coming weeks.
