Bitcoin's price has seen a recent decline amid geopolitical tensions, with analysts warning of potential drops to $47,000 if critical support levels fail.
On February 24, Bitcoin's price dipped to approximately $62,800, marking a nearly 5% decline in a single day. As of now, the cryptocurrency has slightly rebounded to $63,100.
Ethereum also experienced a downturn, falling 4.8% to $1,800, contributing to a broader market decline. Overall, the total market capitalization of digital assets decreased by 4%, settling at $2.2 trillion. Current market sentiment indicates "extreme fear," with a sentiment indicator reading of 8.
Analysts attribute the recent price correction to rising geopolitical tensions, particularly related to potential increases in U.S. tariffs. Min Zhong, a researcher at Presto Research, noted that these macroeconomic factors are increasing risk aversion among digital asset investors.
Support Levels Under Scrutiny
Andri Fauzan Adziima, head of research at Bitrue, highlighted the $60,000-$63,000 range as a crucial support level for Bitcoin. Maintaining prices within this corridor could create favorable conditions for the market, potentially leading to a squeeze on short-sellers.
Conversely, a decline below $60,000 could see Bitcoin's value fall to between $50,000 and $55,000, with a worst-case scenario dropping as low as $47,000. Adziima warned that worsening external factors could lead to cascading liquidations, which might prolong the market correction.
Market Dynamics and Deleveraging Trends
Zhong pointed out that cryptocurrencies are experiencing a more pronounced decline compared to traditional risk assets, which have shown relative resilience. This divergence suggests that the current sell-off is influenced not just by macroeconomic factors but also by weak demand, low liquidity, and ongoing deleveraging in the crypto market.
"The sell-off is driven by weak demand and low liquidity, alongside macroeconomic pressures," Zhong stated.
Recent ETF data supports this observation, as Bitcoin spot funds have seen five consecutive weeks of outflows, the longest streak since March 2025. Nonetheless, a complete capitulation has not yet occurred. According to Adziima, the current market downturn is largely due to deleveraging, which is evidenced by significant long liquidations, negative funding rates, and a notable drop in open interest.
"While short-term holders are experiencing losses, long-term holders are not yet liquidating en masse; on-chain signals suggest quiet accumulation amid risk reduction efforts," Adziima explained.
Interestingly, in February, major speculators showed confidence in Bitcoin's recovery, significantly reducing their short positions in the cryptocurrency.
