Bitcoin’s Biggest Weekly USD Drop: What’s Next for BTC?

Bitcoin just had its worst weekly drop ever in U.S. dollar terms, shedding 14% in seven days. If you’ve been watching the markets, you’ve probably noticed sentiment shifting fast. With BTC dipping below $80,000, traders are wondering—how low can Bitcoin go?

The good news? Large Bitcoin holders, or whales, are starting to accumulate again. The bad news? There’s still a lot of uncertainty ahead, with economic data and Federal Reserve policy looming over risk assets.

Here’s what you need to know about Bitcoin’s recent sell-off, market sentiment, and key levels to watch in the coming weeks.

Bitcoin Drops 14% in a Week—What’s Behind the Sell-Off?

Last week, Bitcoin closed out its biggest red weekly candle ever, signaling one of its steepest dollar-value declines in history. While BTC has seen bigger percentage drops, this sell-off stands out due to the sheer amount of value lost in a single week.

Key Reasons for the Drop:

Risk-Off Market Sentiment – Investors have been pulling out of risk assets like crypto and stocks amid concerns over inflation, interest rates, and global trade policies.
Technical Breakdown – BTC fell below key support levels, triggering stop losses and forcing liquidations.
Macroeconomic Data Concerns – This week, inflation reports (CPI & PPI) and job data are on the calendar, adding further uncertainty.

Bitcoin traders are now watching two critical price levels:

$78,000 – A level BTC has defended in recent weeks.
$69,000 – The previous all-time high from 2021, which some analysts suggest could become a new support zone if Bitcoin falls further.

What’s the Federal Reserve’s Role in All This?

With inflation data coming out this week, all eyes are on the Federal Reserve. A hot CPI report could force the Fed to keep interest rates high longer than expected, keeping liquidity tight and risk assets under pressure.

As of now:

The Fed is unlikely to cut rates in March (only a 3% chance).
Rate cut odds for May are falling, meaning the Fed could stay hawkish longer than investors hoped.
Bitcoin has historically struggled in a tight liquidity environment, but once rate cuts begin, BTC could rally.

If the market sees signs of rate cuts getting delayed, we could see further downside for Bitcoin and equities in the short term.

Market Sentiment: Fear Is Taking Over

Bitcoin’s Fear & Greed Index is back in “Extreme Fear” territory, sitting at 17/100—one of its lowest readings in years. Historically, extreme fear has often been a buying opportunity, but short-term volatility remains a concern.

At the same time, stock market sentiment is also turning negative, with some analysts comparing the mood to past crashes like 2008 (GFC) and 2020 (COVID crash). While extreme fear can lead to capitulation, it also tends to mark market bottoms before a reversal.

Are Whales Buying the Dip?

Despite the drop, big-money investors are accumulating Bitcoin again. Data from Santiment shows that wallets holding 10+ BTC added nearly 5,000 BTC to their collective holdings in the past week.

What Does This Mean?

Whale accumulation suggests that large investors see current prices as attractive.
Historically, whale buying has preceded market recoveries, but the timing varies.
If accumulation continues, BTC could see a relief bounce in the second half of March.

Key Levels to Watch in the Coming Weeks

If Bitcoin continues dropping, here’s what to watch:

$78,000 – Recent support level. A break below could lead to a retest of lower levels.
$75,000-$77,000 – Next major liquidity zone where liquidations could spike.
$69,000 – The previous all-time high from 2021, which some analysts believe could act as long-term support.

On the flip side, if Bitcoin starts recovering, here’s what bulls need to reclaim:

$82,000 – Recent resistance level where BTC failed to hold last week.
$85,000 – A key psychological level that could signal a short-term recovery.
$90,000+ – Breaking back above $90K would shift momentum back to bullish.

Final Thoughts: Short-Term Pain, Long-Term Gain?

Bitcoin’s biggest weekly drop ever has put traders on edge, but the overall market cycle remains bullish. While short-term downside is possible, whale accumulation and a potential shift in Fed policy later this year could set the stage for a strong recovery.

For investors with a long-term outlook, Bitcoin pullbacks have historically been buying opportunities. However, with inflation data and macroeconomic uncertainty in play, short-term caution is warranted.

Keep an eye on $78,000 and $69,000 as key support levels—if Bitcoin holds these zones, a rebound could be on the horizon.