The Bitcoin market experienced a price decrease because of a major ByBit security breach that occurred on Friday. The Bitcoin price dropped during the S&P 500’s most severe day in 2025 while options trading analytics indicated potential future depreciation for Bitcoin.
Short-Dated Skew Turns Negative as Traders Hedge Against Losses
The short-term BTC skew 1 week on Deribit exchanged negative values on February 21. A rising number of investors buy put options during this period which demonstrates their expectation that BTC prices will continue to drop. The enlarging negative skew value demonstrates an increasing trader demand for put option hedging that requires premium payments.
The statistical measurement has always preceded Bitcoin price decreases in previous market cycles. The BTC value experienced a swift fall from $98,000 to below $95,000 during the day following a December 2024 skew modification. An additional market downturn for Bitcoin may occur if history repeats itself in this way.
S&P 500 Decline Raises Concerns Over Risk Assets
February 21 proved to be the most disastrous day for the S&P 500 index during 2025 as it lost over $900 billion in total market capitalization. Investors holding Bitcoin have heightened their anxiety because its increasing correlation with traditional financial markets coincides with this market downturn.
The market suffered its worst loss in 2025 after University of Michigan research revealed US consumer sentiment dropped by 10% for February. The combination of economic confusion with inflation worries has forced investors to minimize their allocation to risk-based investments that include Bitcoin. The Coinbase Premium Index demonstrates decreased BTC market demand in the United States because it reached its lowest point in one month.
Bitcoin Faces Key Support and Resistance Levels
The Relative Strength Index (RSI) indicator points to bearish Bitcoin momentum because it has not surpassed the 50 benchmark since three weeks ago. Weakening buying pressure may emerge when the selling pressure index drops further below the present level.
Traders are monitoring Bitcoin support at the $92600 mark because the cryptocurrency has sustained this level since December. A downward breach of this trading area might start a fresh bout of selling activity across the market. The central resistance point for Bitcoin exists at $98,330. Bitcoin reached this level temporarily until the ByBit hack along with the S&P 500 slump caused its momentum to stop. BTC requires a successful re-base of this level before it can initiate its challenge for $100,000.
Will Bitcoin Recover or Extend Its Decline?
A downward pressure on Bitcoin prices appears likely due to reducing short-dated skew in addition to a weaker stock market and diminished risk asset demand. The recent highs face an uphill battle for BTC to recover because fresh market buying activity remains absent. Market participants will analyze current patterns to decide if Bitcoin can bounce back or if its price will slide downward extensively.
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