Key Points
- Bitcoin experienced a flash crash, dropping from $100,000 to $91,300 on February 3rd, and has since been consolidating between $95,500 and $99,000.
- Solana’s (SOL) market capitalization saw a steep correction, resulting in a 7% loss in value over the last 24 hours.
Bitcoin’s price took a hit on February 3rd, experiencing a flash crash that saw it drop from $100,000 to a low of $91,300. Since then, the cryptocurrency has been consolidating in a range between $95,500 and $99,000. Concurrently, altcoins are struggling to gain as Bitcoin’s dominance hovers close to a four-year high.
Market Impact on Solana
The Solana (SOL) ecosystem saw a significant correction in its market capitalization, falling to $9.96 billion and losing over 7% of its value within 24 hours, as per CoinGecko data. This decline has been attributed to factors such as controversies around the LIBRA and MELANIA meme coins and alleged connections to entities that withdrew $100 million from the latter. These factors have negatively impacted meme coins in Solana, leading to a decline in sentiment and demand among traders.
Bitcoin’s Influence on the Market
The rally of Bitcoin’s price to the $100,000 milestone and its all-time high of $109,588 initiated the bull market of 2024. However, in 2025, Bitcoin suffered a flash crash, dropping to a low of $91,231 on February 3. Since then, Bitcoin has been consolidating within a range between $95,500 and $99,000 as trader sentiment declines. The cryptocurrency market’s reaction to U.S. macroeconomic developments and changes within the administration has led to volatility in Bitcoin and altcoins, as shown by derivatives market data.
Bitcoin’s volatility has decreased from its peak of 2.07% on February 6, with the last 30-day estimate putting it at 1.53%. This decline in volatility suggests a lower likelihood of price swings in Bitcoin. Despite the short-term cooling off period in the crypto market, it is unlikely that Bitcoin has hit its cycle top.
Altcoins and Bitcoin Dominance
The total crypto market capitalization excluding Bitcoin is currently around the $1.19 trillion mark, as per TradingView data. This metric dropped nearly 20% in February 2025 until Wednesday, February 19. Altcoins continue to consolidate as Bitcoin dominance hovers around its four-year peak. However, traders should be on the lookout for any changes in this metric. If Bitcoin dominance drops, capital could rotate into altcoins and utility tokens, potentially leading to an altcoin season.
Bitcoin is currently stagnant, with the 7-day volatility at eight-month lows, and 30-day volatility at October 2024 lows. The largest cryptocurrency is currently less volatile than 37% of top 100 U.S. public companies. Such low relative volatility is a rare occurrence, last observed in October 2023.
Trading volumes across exchanges have fallen to pre-election levels after significant de-leveraging, suggesting that altcoins are likely preparing for recovery. Professional traders are risk-averse as the contango narrows and CME basis falls to September levels, according to insights from a K33 research report. The short-term sentiment among traders is cautious, and institutional holder exposure to crypto has slowed down.
Altcoin season is a period where the returns on 75% of the top 50 altcoins consistently outperform Bitcoin over a 90-day timeframe. The Altcoin Season Index on Blockchaincenter is used to determine whether it is the altcoin season yet. On Wednesday, the index read 45 on a scale of 0 to 100, indicating that it is not the altcoin season yet.
As altcoins consolidate, it may be an ideal time for sidelined buyers to begin accumulating before the next leg up. Tokens like Bittensor (TAO), Pyth Network (PYTH), Ethena (ENA), and blue-chip meme coins like Dogecoin (DOGE) and Pepe (PEPE) are currently below the average traded prices and could begin their recovery once the altcoin rally resumes.
Bitcoin Price Outlook
A K33 research report shows that traders have taken a cautious hands-off approach on the Chicago Mercantile Exchange (CME) over the past few weeks. The sentiment among derivatives traders is bearish as premiums continue to push lower, while open interest remains stagnant amidst no significant spike in ETF activity.
Bitcoin’s initial post-Trump election rally pushed the asset above $100,000. However, as the market adjusts to announcements and macro developments, traders exhibit growing risk aversion. Derivatives traders are less motivated to add long exposure to Bitcoin, activity levels overall remain shallow, and open interest stays flat throughout the week amidst weak futures ETF flows.
As Bitcoin consolidates and trades in a range-bound manner, the question of whether the bull run is over looms among market participants.
Nick Forster, Founder at Derive.xyz, suggests that volatility forecasts a rise in BTC price. According to Forster, BTC’s 7-day implied volatility (IV) is hovering around 40%, while 6-month volatility sits at 54%. This discrepancy between BTC and ETH volatility signals that BTC may be undervalued, considering its 2-year high in market dominance (60.7%), increasing momentum for BTC strategic reserves, and major geopolitical developments. However, the chance of BTC hitting above $115K at the end of this quarter has decreased from 17% last week to 12% this week.
At the time of writing, Bitcoin trades at $95,689.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
