While the cryptocurrency market is witnessing bearish sentiment, capital movement trends suggest more cause for concern, as investors appear to be becoming skeptical in the long term. Specifically, for the week ending February 26, cryptocurrency funds experienced a $2.6 billion outflow, marking the largest withdrawal on record, according to data shared by financial markets commentary platform The Kobeissi Letter in an X post on February 28. This outflow surpassed the previous record of $2.1 billion, set at the end of last year, by approximately $500 million. The sharp decline in investor confidence was particularly evident on February 25, when Bitcoin Exchange-Traded Funds ( ETFs ) saw a record single-day withdrawal of $1 billion, further exacerbating concerns about the market’s stability. Record crypto weekly outflows. Source: BofA According to the data sourced from BofA Global Investment Strategy and EPFR , the four-week moving average ( MA ) of crypto fund flows has turned negative for only the fourth time in the past 14 months, indicating a major shift in sentiment among institutional and retail investors. Bitcoin’s worst monthly close Adding to the bearish outlook, Bitcoin ( BTC ) plunged about 20% in February, suffering its worst monthly close since June 2022. Bitcoin price analysis chart. Source: Barchart Nevertheless, the asset has attempted to recover after plunging below $80,000. By press time, the asset was trading at $85,249, having rallied by almost 9% in the last 24 hours. However, BTC remains red on the weekly chart, down over 11%. Bitcoin seven-day price chart. Source: Finbold Despite the short-term recovery, Bitcoin’s technical outlook presents a concerning picture. According to an analysis shared by cryptocurrency analyst Crypto Rover in an X post on February 28, the latest market conditions suggest that Bitcoin is more oversold than during the FTX collapse in late 2022, when BTC plummeted to $16,000. To this end, Bitcoin’s 90-day market and realized price gradient oscillator indicate that the current oversold reading is deeper than any point in the last five years, including the FTX-induced crash. Bitcoin price analysis chart. Source: Crypto Rover The oscillator, which measures Bitcoin’s short-term price momentum relative to its realized price, has dipped below the -2 standard deviation band, which historically signals extreme market pessimism. Possible shift in Bitcoin sentiment Looking forward, cryptocurrency on-chain analytics platform Santiment suggests a possible shift in market expectations. In an analysis shared on February 28, the platform stated that Bitcoin’s latest price swings have made for one of the most emotional weeks in cryptocurrency since the August 5, 2024, crash. While fear and greed are running high, Santiment observed that a clear pattern has emerged: the crowd keeps misreading Bitcoin’s every move. Bitcoin’s social media sentiment. Source: Santiment Data indicates that traders’ social media predictions have been consistently off the mark. When optimism surges and mentions of $90,000 to $95,000 increase, Bitcoin’s price tends to drop. Conversely, when fear takes over and discussions of $70,000 to $75,000 spike, Bitcoin immediately begins to rise. This dynamic has repeatedly played out, with traders chasing breakouts at the wrong moments and panic-selling just before rebounds. Regarding the cryptocurrency Fear & Greed Index, the reading stands at 20, signaling extreme fear as of March 1, 2025. Bitcoin Fear & Greed Index. Source: Alternative.me Historically, extreme fear phases have sometimes presented buying opportunities for contrarian investors, while others remain cautious, fearing further downside. Featured image via Shutterstock The post Start of bear market? Investors pulling out of crypto at an alarming pace appeared first on Finbold .
