Crypto markets are experiencing a dramatic downturn, with over $500 billion wiped out in just one week as Bitcoin struggles to stay above its 4-month low. The price of Bitcoin has plunged nearly 15% in a week, reaching a record low of around $82,300. This drop comes amid increased selling pressure and the market’s overall uncertainty. The crash is attributed to several factors, including an AI-driven stock surge and persistent outflows from Bitcoin ETFs. Let’s delve into the key drivers behind this volatile week for Bitcoin. 1) AI Stocks Take Center Stage: One of the main reasons for Bitcoin’s decline is a surge in artificial intelligence stocks, particularly Nvidia. The chipmaker’s impressive Q4 revenue growth, exceeding expectations with a 12% increase from the previous quarter and a whopping 78% rise year-over-year, has fueled investor interest in AI-related investments. This shift towards high-growth industries contributed to Bitcoin’s declining momentum. 2) Outflows from Bitcoin ETFs Persist: Another significant factor affecting Bitcoin’s price is the ongoing outflows from Bitcoin exchange-traded funds (ETFs). According to Farside data, these ETF outflows have reached a staggering $2.43 billion between February 24 and 26. This marks seven consecutive trading sessions of outflows and points to increasing market uncertainty. Leading the outflows are major financial institutions like Fidelity which is actively selling Bitcoin. 3) Options Expiration: The upcoming expiration of approximately $5 billion worth of options contracts on February 28 adds further pressure to the market. A significant portion of these expiring options, with a strike price above the current market price, are likely to expire worthless. This could lead to more selling in the market. Bitcoin’s price has fallen sharply, currently trading at around $85,534, a 4% drop in the past 24 hours. The critical support level for Bitcoin is $83,000 as losing this level could push prices even lower. On the other hand, if Bitcoin can hold this level, it could signal a potential price bounce. The Relative Strength Index (RSI) has fallen to 25.92, indicating extreme oversold conditions. Historically, when the RSI drops below 30, Bitcoin tends to experience a short-term price rebound.