The cryptocurrency market is struggling to find its footing amid a pervasive risk-off sentiment, with the Crypto Fear & Greed Index entrenched in the "Extreme Fear" zone at 16 points. This gloomy mood is reflected in market metrics, as the total crypto market capitalization fell 1.07% to $2.34 trillion, while the 24-hour trading volume dropped 19.11% to $100.84 billion.
Major assets like Bitcoin (BTC) and Ethereum (ETH) led the decline. BTC dipped 1.51% to $67,769.88, maintaining a market dominance of 57.9%. ETH saw a 1.61% drop to $2,047.53, with a dominance of 10.6%. The broader downturn extended to other sectors, with DeFi's Total Value Locked (TVL) slipping 0.58% to $95.44 billion and NFT sales volume plunging 16.02% to just over $5 million.
Despite the bearish backdrop, a significant bullish signal emerged from institutional channels. Bitcoin spot ETFs recorded a substantial net inflow of $254 million, starkly contrasting with Ethereum ETFs, which saw only $6.6 million. This divergence underscores a market conviction that any meaningful recovery will be led by Bitcoin. Analysts suggest that BTC's consolidation around the $65,000 level, combined with these strong capital inflows and controlled derivatives leverage, could be forming a potential market bottom.
The market narrative is one of conflicting signals. While fear dominates, derivatives data shows that 66% of the $250 million in recent liquidations were long positions, which could help reset excessive leverage. Furthermore, the Altcoin Season Index remains range-bound, indicating that capital is not yet rotating away from Bitcoin into altcoins in a significant way. The upcoming regulatory clarity on March 1st is viewed as a potential catalyst that could either spark a rally or act as a bull trap.
In other notable developments, payments giant Stripe expressed interest in acquiring PayPal, and Citi Bank revealed plans to integrate Bitcoin services for institutional investors. Meanwhile, meme coins and smaller-cap tokens like HARRY POTTER DOGS ($DOGS), PEPE AI ($PEPE), and D ($D) saw explosive gains of over 900%, highlighting the continued speculative activity in niche corners of the market even during a broader downturn.
