Bitcoin slipped to $65,000 during the weekend sell-off, with Solana, XRP, and Dogecoin all falling 6%

The pullback erased most of Wednesday's gains towards $70,000, as strong producer price data and a decline in Nvidia's stock price after earnings reports pushed risk assets lower ahead of the weekend.

Key takeaways:

• Affected by deteriorating risk sentiment in US stocks, Bitcoin briefly rose above $70,000 before falling back to around $65,700.

• Altcoins saw even more significant declines, with major tokens such as Solana and Ethereum falling by more than 6%. Even with strong inflows into US spot Bitcoin ETFs, their recent relative strength was completely erased.

• Better-than-expected US PPI data, rising concerns about job replacement, and declining USDT reserves on exchanges have created multiple macroeconomic headwinds that continue to put pressure on Bitcoin, which is currently fluctuating between $60,000 and $70,000.

Bitcoin attempted to return to the $70,000 mark earlier this week, but the rally only lasted about 48 hours.

In early Asian trading on Saturday, the price of the world's largest cryptocurrency fell back to $65,735, down 3% in 24 hours and extending its weekly decline to 2.8%. Wednesday's rebound briefly pushed Bitcoin close to $70,000, but as risk sentiment continued to deteriorate during Thursday and Friday's US trading sessions, more than half of those gains have been wiped out.

Altcoins experienced even larger sell-offs. Solana fell 6.7%, Ethereum fell 6.2%, Dogecoin fell 5.1%, and XRP declined 4%. These declines turned most major tokens negative for the week, erasing previous positive signals. BNB showed some resilience, falling only 2.5%.

On Friday, during US stock trading, the S&P 500 closed down 0.4%, the Nasdaq 100 fell 0.3%, and the Dow Jones Industrial Average dropped 1.1%. Nvidia continued its decline after digesting the impact of its earnings report, with its stock price falling another 4.2%, a significant factor triggering the market correction.

The Producer Price Index unexpectedly rose 0.5%, exacerbating inflationary pressures and suggesting that the Federal Reserve may find it difficult to cut interest rates in the near term. Meanwhile, Block Inc.'s massive layoffs sparked market concerns—artificial intelligence is not only creating new jobs but also beginning to replace existing ones.

Crypto assets followed the decline in US stocks, but the losses were significantly larger. The S&P 500 fell 0.4%, Bitcoin fell 3%, and altcoins generally fell by more than 6%. Leveraged funds that re-entered the market during Wednesday's rebound faced large-scale liquidations during the correction.

Ironically, institutional fund flows this week were actually strong.

The US spot Bitcoin ETF saw net inflows of $1.1 billion over the past three days, on track for its best weekly performance in months. However, ETF inflows were insufficient to offset broader macroeconomic headwinds.

On-chain data is also sending warning signals. CryptoQuant data shows that USDT stablecoin reserves on exchanges have fallen from $60 billion to $51.1 billion in the past two months. The company warned that if reserves fall below $50 billion, it could trigger a “massive sell-off.”

In other areas, Strategy's stock is among the most shorted of major US companies as the market raises more questions about the sustainability of the company's debt-financed Bitcoin purchase program.

Regarding Ethereum, some large holders have begun to reduce their holdings at a loss. DAT company ETHZilla has officially abandoned its Ethereum accumulation strategy, shifting towards tokenizing real-world assets and completing a rebranding.

Currently, Bitcoin has fallen back to the middle of the $60,000 to $70,000 range where it has been consolidating since the February 5th crash. Wednesday's price action showed that the upper edge of this range is acting as resistance. The key question entering March is whether the lower edge of this range will remain effective support.

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