Bitcoin price extended its losses on March 11, plunging to a four-month low as macroeconomic uncertainty, institutional outflows, and technical weakness pressured prices. BTC fell to $76,811 before rebounding to trade near $79,500.
The latest drop came as risk assets sold off, with the S&P 500 and Nasdaq Composite Index falling 2% and 3.5%, respectively.
Traders cited concerns over reduced U.S. government spending, ongoing macroeconomic instability, and a flight to safer assets.
“The rally after the U.S. Strategic Reserve was announced has been completely erased,” The Kobeissi Letter wrote on X, pointing to recent spending cutbacks by the Department of Government Efficiency (DOGE) as a factor in weakening economic momentum.
Institutional Outflows and ETF Weakness Add Pressure
Data from Farside Investors revealed consecutive days of negative net flows from U.S.-based Bitcoin exchange-traded funds (ETFs). This suggests waning institutional interest, which has historically supported Bitcoin’s price action.
A report from Bitfinex Alpha highlighted the role of the options market in BTC’s volatility. Analysts noted that over $3 Billion in Bitcoin and Ethereum options expired last Friday, intensifying price swings.
“Options realized volatility surged above 80%, signaling heightened instability as traders reacted to shifting macroeconomic conditions,” the report stated.
Bitfinex analysts pointed out that traders suffered realized losses of up to $818 million per day, indicating a potential bottoming process. However, uncertainty surrounding macroeconomic conditions remains a dominant risk factor.
Bybit Hack Fallout Adds More Pressure to Bitcoin’s Slide
Security concerns have added to Bitcoin’s struggles, with the fallout from last month’s Bybit hack fueling additional sell-offs.
Analysts at QCP Capital highlighted that stolen funds are still being offloaded, increasing downward pressure on BTC.
“Today’s price selloff may also be exacerbated by holders front-running further hacker-driven supply,” QCP Capital noted in a Telegram update.
The hackers, who have already seen their stolen assets lose 25% in value, appear to be cashing out aggressively.
The firm also warned that Bitcoin’s near-term outlook remains weak, with bearish sentiment likely to persist until at least the third quarter. Growing correlations between BTC and equities could make a recovery even more challenging.
“Until crypto finds a new narrative, we’re likely to see an increased correlation between BTC and equities,” QCP Capital added
Bitcoin Sentiment Hits ‘Extreme Fear’ Zone
The Crypto Fear & Greed Index has plunged back into the ‘extreme fear’ category, with a reading of 20. This marks a sharp decline from 27 just a day prior, suggesting traders are increasingly risk-averse. Historically, such extreme fear zones have preceded market bottoms, though timing remains uncertain.
Titan of Crypto pointed out that Bitcoin’s price historically lags behind global monetary supply by approximately 70 days. If this trend holds, BTC could recover by May. However, for now, bearish sentiment dominates.
Bitcoin Price Crashes Below Key Support—Is $75K the Next Stop?
Bitcoin daily chart reveals a descending channel, with BTC recently bouncing off the lower trendline near $76,800.
The 200-day exponential moving average (EMA) sits at $85,645, while the 50-day EMA is at $92,061—both now acting as major resistance levels. BTC’s failure to reclaim these levels suggests that bears remain in control.
Additionally, the Fibonacci retracement levels highlight $91,828 as the 50% retracement level of the prior rally.
If Bitcoin attempts a rebound, this level could pose strong resistance. A deeper pullback could see BTC testing the 61.8% retracement at $75,259, which aligns with recent price action.
Meanwhile, the Relative Strength Index (RSI) sits at 34.19, nearing oversold territory but still lacking a strong bullish divergence. Analyst Rekt Capital noted that past Bitcoin price bottoms have formed when daily RSI dipped below 28.
“Bitcoin’s price would either bottom or be between -2% to -8% away from a bottom,” Rekt Capital explained, suggesting a potential local low is near but not confirmed.
