The sharp selloff began around 7:20 p.m. ET, when BTC briefly touched $60,000 before rebounding toward $64,100. Volatility remains elevated. Ethereum followed the broader market lower, sliding to $1,750 before stabilizing near $1,899 at the time of writing.

$2.67 Billion in Liquidations Wipe Out Overleveraged Positions

The sudden downturn triggered a massive liquidation cascade across derivatives markets.

Over the past four hours alone, combined long and short liquidations reached $817 million. Total liquidations over the last 24 hours climbed to $2.67 billion — with $2.31 billion coming from long positions, highlighting how heavily bullish traders were positioned.

CMC’s Crypto Fear & Greed Index dropped to 5, signaling “extreme fear,” its lowest reading since the index launched in June 2023.

“A Classic Leverage Unwind”

According to Vincent Liu, CIO at Kronos Research, the crash reflects a perfect storm:

“Bitcoin’s sharp drop looks like forced liquidations from overleveraged longs, ETF and institutional outflows, and a broader risk-off macro backdrop. This is a classic leverage unwind — violent, fast, and sentiment-driven.”

Liu also noted that Bitcoin’s capitulation metric just printed its second-largest spike in two years, pointing to a surge in forced selling.

BTC Markets analyst Rachael Lucas emphasized the psychological shift among traders:

“Sentiment is firmly risk-off. Traders are no longer trying to catch falling knives and are prioritizing capital preservation. You can see rallies being sold into, and volume fading once liquidation flows subside.”

Repeated failures to hold key support levels have pushed participants from dip-buying into wait-and-see mode — reinforcing downward momentum.

ETF Outflows Signal Short-Term Reset

Institutional investors are also pulling back. Spot Bitcoin ETFs recorded more than $800 million in net outflows across Tuesday and Wednesday alone.

Lucas believes long-term conviction hasn’t vanished, but short-term positioning has clearly reset:

“Historically, these phases shake out weaker hands while longer-term holders remain relatively intact. Conviction isn’t gone — it’s being tested.”

Critical Support Zone: $58,000–$60,000

Liu says Bitcoin must hold the $58,000–$60,000 range for any meaningful recovery attempt.

“A rebound could start with price stabilization and positive catalysts,” he added, “but confirmation will take time once the dust settles.”

Meanwhile, the Crypto Fear & Greed Index in global markets slipped to 9, echoing sentiment levels last seen during the Terra collapse in June 2022.

Bitcoin is currently trading near $65,769, but damage remains heavy. BTC has fallen roughly 38% in just three weeks from its 2026 peak near $97,000, effectively erasing nearly all gains from the past 16 months.

For now, the market is operating in survival mode rather than accumulation mode. Support levels are breaking, patience is rising, and risk appetite is fading — leaving traders with one pressing question: is this the bottom, or just another pause on the way down?

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