Bitcoin loses its 2021 all-time-high support as liquidations surge, sentiment collapses, and macro pressures intensify across global crypto markets.
Bitcoin fell below its 2021 all-time high of $69,000 during intense market volatility. Moreover, the drop led to massive liquidations in crypto markets. As a result, investor confidence fell sharply.
The sell-off was accelerated during Asian and European trading hours. Consequently, Bitcoin plunged briefly towards $65,000 before leveling off. In the meantime, market participants scrambled to reduce exposure.
Bitcoin Crash Triggers Massive Liquidations
Ethereum also took a lot of pressure during the downturn. ETH fell to $2,000, which was a 24-hour decrease of 6.96%. Therefore, the losses are not limited to Bitcoin but were further spread to major altcoins.
According to CoinGlass, $951 million in liquidations were made in 24 hours. Notably, long positions were the reason for $790 million of forced closures. Hence, bullish leverage was multiplied by downside momentum.
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Other estimates put liquidations in the derivatives markets at more than $1 billion. Some $980 million came from bullish bets unwinding rapidly. As a result, volatility spiked throughout the exchanges.
The decline wiped out all the gains since the November 2024 US presidential election. As a result, Bitcoin was brought back to pre-election prices. Analysts say this is a full reversal of the so-called Trump rally.
Market sentiment was severely aggravated during the crash. The Fear and Greed Index came in at 14. Therefore, conditions officially moved into the extreme fear zone.
Historically, such readings are a reflection of panic-driven selling behaviour. However, they can also come before technical rebounds. Still, uncertainty is high.
Trading volumes exploded as prices went down. This surge was confirmation of widespread participation in the sell-off. Meanwhile, bid depth contracted across major spot markets.
Liquidity conditions deteriorated with the expansion of volatility. As a result, there were more extreme price swings during small timeframes. Many traders complained of slippage and difficulty of execution.
Macro Pressures Deepen Market Stress
There were a number of macroeconomic factors that contributed to the downturn on February 5, 2026. Weak US labor data rattled global investors. As a result, risk assets were subject to coordinated selling.
Rising layoff announcements added to the economic anxiety. Companies including Amazon and UPS were reporting their workforce reduction. Therefore, the recession fears came back to fore across the markets.
Developments in the tech sector also put pressure on sentiment. Major firms made aggressive AI investment plans and announcements. Alphabet is projected to spend between $175 billion and $185 billion on capital spending.
Investors responded by selling growth-linked assets. As a result, there was contagion from tech weakness in crypto markets. Correlations increased with the decline.
Further increased selling pressure from the monetary policy. Fears increased after the nomination of Kevin Warsh to the Federal Reserve. Market participants expected tighter liquidity conditions to be in place.
Speculation appeared for a prolonged restrictive monetary policy. Therefore, capital flowed from speculative assets. Crypto markets felt the pinch quickly.
From a technical point of view, $69,000 now serves as a resistance. Analysts can identify multiple downside zones if the selling continues. Immediate support is between $56,000 and $59,000.
Some bearish forecasts go even lower. Stifel analysts said there could be a fall to $38,000 under extreme scenarios. However, such outcomes are still controversial.
For now, traders are wary. Volatility remains high across derivatives and spot markets. Consequently, risk management has become a priority.
Despite fear, long-term participants persist in monitoring trends in structure. Institutional interest and infrastructure development continue. Still, near-term direction is dependent on macro stability.
Overall, Bitcoin’s loss of its 2021 peak is a psychological shift. Markets are re-thinking valuation assumptions. Therefore, it is possible that the coming weeks will be defining for sentiment in 2026.
Source: https://www.livebitcoinnews.com/69k-falls-bitcoin-loses-2021-all-time-high-support/
