Bitcoin Wipes February Lows at $60K as Capitulation Deepens

Bitcoin has swept its February lows at $60k after tumbling downward on the price charts over the past three weeks. The risk of further losses lingered, as heavy capital outflows from Bitcoin showed no signs of slowing.

The capital flight was driven by a sentiment shift away from crypto and toward traditional financial markets, with the S&P 500 reaching record highs while crypto wallowed near yearly lows. Institutional investors were feeling the heat, and Strategy was sitting on its largest-ever unrealized loss. AMBCrypto reported that short-term holders were offloading their coins almost exclusively at a loss, another indication of capital outflows.

Crypto analyst Darkfost pointed out that Bitcoin [BTC] was close to setting a historical record. The 30-day moving average of the transactions count sat around 640,000, closing in on the 660,000 high made during the September 2024 correction. The pattern was unusual for the cycle, since high transaction counts typically accompany bullish phases or market tops. High transaction counts paired with falling price trends pointed to a capitulation phase and a significant change of hands, one of the most noteworthy such changes in Bitcoin's history, the analyst concluded.

Meanwhile, BTC miners' profit margins took a dramatic nosedive. Production cost hovered around $43k over the past month, but the price has dived from above $80k to nearly $60k. Miner profit margins fell from 98% to 47%, a margin squeeze that would make even the most stoic ASIC operator wince.

The daily hashrate also took a hit, falling 33% in three weeks, though the metric's 30-day moving average remained above the 60-day average. Miner inflows to exchanges spiked, too, another indication of pressure. Heavy BTC exchange inflows of 10k-12k BTC a day warranted a cautious outlook until inflows normalize to 1,000-3,000 BTC a day.

The cascading sell pressure has not yet halted, and a definitive market bottom might not yet be in.

Sentiment was extremely fearful, and the ongoing capitulation episode can drive a BTC price move toward $51k.