Bitcoin’s price momentum has taken a sharp downturn, slipping to a 3-day low of $95,800 on February 17, despite strong gains in key altcoins. A growing imbalance in the derivatives market—where short leverage positions now exceed longs by $370 million—has sparked fresh concerns about a sustained bearish trend. Meanwhile, shifting investor sentiment toward alternative cryptocurrencies is gaining traction, fueled by evolving U.S. regulatory signals and mounting ETF speculation.
Bitcoin Tests Critical Support Amid Bearish Momentum
Bitcoin began the week on a weak note, breaking below the $97,000 support level that had held firm for much of the previous week. The drop reflects a broader shift in market dynamics, as bullish and bearish forces that once balanced each other have now tipped in favor of sellers. Over the weekend, bearish pressure intensified, culminating in Monday’s decline to $95,800.
One of the primary catalysts behind this shift is the changing regulatory landscape in the United States. The U.S. Securities and Exchange Commission (SEC) recently acknowledged new ETF filings from Grayscale for several major altcoins, including Ripple (XRP), Cardano (ADA), Solana (SOL), and Litecoin (LTC). While no approvals have been confirmed, the mere acknowledgment has reignited institutional interest in these assets.
👉 Discover how market sentiment shifts can impact your crypto strategy.
This development has contributed to capital rotation out of Bitcoin and into altcoins. As a result, Bitcoin’s dominance—the metric that measures BTC’s share of the total cryptocurrency market capitalization—has dropped by 3% over the past week. This decline underscores a growing preference among investors for alternative digital assets, particularly those with potential regulatory clarity and ETF prospects.
Derivatives Market Signals Deepening Bearish Sentiment
The stagnation in Bitcoin’s price has coincided with a notable shift in trader positioning. According to Coinglass data, active short leverage positions in the Bitcoin derivatives market have surged to $2.26 billion, surpassing long positions valued at $1.89 billion. This $370 million gap indicates that bears currently hold a 20% dominance in open interest.
Such an imbalance is historically significant. When short positions substantially outweigh longs, it often reflects waning confidence among bullish traders. Many are either closing long positions or refraining from entering new ones, suggesting that short-term momentum favors further downside.
If selling pressure persists, Bitcoin could test lower support levels at $94,500 or even $93,000 in the coming days. The failure to defend $95,000 would likely accelerate liquidations and deepen the bearish outlook.
However, there remains a potential for a countertrend move. In highly leveraged markets, an unexpected surge in buying activity can trigger a short squeeze—forcing bearish traders to cover their positions rapidly and driving prices upward. Should a strong bullish catalyst emerge this week, such as positive macroeconomic data or regulatory clarity, Bitcoin could stage a sharp rebound.
Technical Indicators Flash Red for Short-Term Outlook
From a technical perspective, Bitcoin’s price action has turned decisively bearish. The daily chart shows BTC breaking below the 50-day simple moving average (SMA) at $97,476—a key indicator of short-term trend strength. With the 200-day SMA still far below at $80,167, the path of least resistance appears downward unless bulls can reclaim critical levels.
The Moving Average Convergence Divergence (MACD) further confirms the bearish shift. The histogram is deeply negative, with the signal line at -845.93 and the MACD line trending downward at -1,066.64. These readings suggest increasing downward momentum and weakening buyer conviction.
For a bullish reversal to take hold, Bitcoin must first reclaim the 50-day SMA and break through resistance at $98,800. Such a move would signal renewed buyer interest and could pave the way for a recovery toward $100,000. Until then, the risk of further downside remains elevated.
👉 Explore real-time market analytics to stay ahead of trend reversals.
FAQ: Addressing Key Investor Questions
Why is Bitcoin losing ground to altcoins?
Bitcoin’s recent underperformance stems from shifting investor focus toward altcoins, driven by renewed ETF speculation and positive regulatory developments for assets like XRP, ADA, SOL, and LTC.
What support levels should traders watch for Bitcoin?
The immediate support is at $95,000. If this level fails, further downside targets include $94,500 and $93,000. On the upside, resistance lies at $97,000 and $98,800.
Could a short squeeze reverse Bitcoin’s decline?
Yes. With short leverage exceeding longs by $370 million, the market is vulnerable to a short squeeze if a strong bullish catalyst emerges, potentially triggering rapid price appreciation.
What does the drop in Bitcoin Dominance indicate?
A declining Bitcoin Dominance suggests capital is rotating into altcoins, often a sign of increased risk appetite and confidence in the broader crypto market.
Is the current sell-off a buying opportunity?
Historically, sharp pullbacks in Bitcoin have presented strategic entry points—especially when followed by macroeconomic stabilization or regulatory clarity.
How might ETF developments impact altcoin performance?
ETF approvals or even positive signals from regulators can significantly boost investor confidence and drive institutional inflows into specific altcoins.
Market Outlook: Altcoins Shine as BTC Faces Pressure
As Bitcoin struggles to regain traction, altcoins are capturing investor attention. The combination of ETF speculation, improving technical setups, and sector-specific catalysts has created fertile ground for outperformance in assets like Solana, Cardano, and Litecoin.
Moreover, the broader crypto market is showing signs of resilience. While BTC’s price stagnation may concern some holders, it also creates opportunities for diversification into high-potential alternatives. Traders who monitor on-chain data, derivatives flows, and macro trends may find asymmetric risk-reward scenarios outside of Bitcoin.
👉 Access advanced trading tools to navigate volatile markets with confidence.
In conclusion, the current $370 million short-long imbalance in Bitcoin’s derivatives market highlights growing bearish sentiment—but also sets the stage for potential volatility. With investor focus pivoting toward altcoins and regulatory momentum building, this week could see alternative cryptocurrencies outperforming BTC. Traders should remain vigilant, monitor key support levels, and prepare for both downside risks and sudden reversals.
Core Keywords: Bitcoin price forecast, altcoins outperform BTC, BTC short leverage, Bitcoin Dominance, ETF speculation, crypto derivatives market, Bitcoin support levels