Bitcoin (BTC) sold off into the early Asian trading session on Thursday as the drop to $72,600 produced significant liquidation of leveraged positions across the crypto market.
Key takeaways:
- Bitcoin price deviated 4.5% from its daily high of $76,050 on Wednesday, dropping to a six-week low of $72,620.
- Overleveraged crypto traders were liquidated out of nearly $935 billion in the past 24 hours.
- Traders say Bitcoin needs to hold above $70,000 to avoid a deeper correction toward $65,000 or lower.
Bitcoin price hits 6-week lows below $73,000
The BTC/USD pair fell as low as $72,620 on Thursday, reversing all gains made since April 13 after the US reportedly carried out a new wave of military strikes on Iran.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
This was accompanied by significant drops in other top-cap cryptocurrencies, wiping out more than $80 billion from the crypto market over the last 24 hours.
Related: Bitcoin falls further as BTC miners pivot to AI, pro-crypto legislation stalls
The derivatives market suffered a similar fate. More than $874 million in long positions were liquidated, with Bitcoin accounting for $348.5 million of that total. Ether (ETH) followed with $228.5 million in long liquidations.
Across the board, a total of $935.6 million was wiped out of the market in short and long positions, as shown in the figure below.
Crypto liquidations (screenshot). Source: CoinGlass
The single biggest liquidation occurred on Hyperliquid, where a $15.34 million BTC-USD long position was closed.
Additional data from CoinGlass showed a slight drop in Bitcoin’s futures open interest (OI) over the last 24 hours across all exchanges. The decline was more pronounced on the Chicago Mercantile Exchange and BingX, whose Bitcoin OI has fallen by 9.8% and 9% over the last 24 hours, respectively.
Even though futures longs (buyers) and shorts (sellers) are always matched, declining OI suggests reduced leverage and market participation, often signaling bearish sentiment. For example, a 30% decrease in OI between Jan. 14 and Feb. 6 was accompanied by a 38% drop in BTC price.
Meanwhile, US-based spot exchange-traded funds (ETFs) continue to post heavy outflows, indicating waning institutional interest. These ETFs have recorded outflows for eight consecutive days, totaling $2.6 billion. The $733 million in net outflows recorded on Wednesday marked the largest withdrawal since Jan. 29.
Spot Bitcoin ETF flows chart. Source: SoSoValue
As Cointelegraph reported, global Bitcoin investment products also posted outflows totaling $1.3 billion last week, adding to BTC’s headwinds.
$70,000 is now Bitcoin’s last line of defence
Bitcoin’s 4% drop over the last 24 hours has seen it lose the crucial $75,000 support, as the bears gained momentum.
Traders are now watching key support areas on the downside, including the 100-day simple moving average (SMA) at $73,000 and the demand zone above $70,000.
“Renewed US-Iran fighting overnight sent us lower with mass liquidations,” analyst Nicrypto said in a Thursday X post, adding:
“We have fallen well below the previous $75K support zone & are now at the critical $73K support.”
MN Capital founder Michael van de Poppe referred to Bitcoin’s latest sell-off as a “standard approach” typical of the final days of the month, “where markets correct as rebalancing takes place among asset managers.”
The analyst said, “Bitcoin showing weakness isn’t a recipe for a new low,” unless it drops under the $71,400-$73,400 support area as shown in the chart below.
“This is my last stance of an important support zone; otherwise, I’d expect lower $60Ks to be tested for support.”
BTC/USD daily chart. Source: Michael van de Poppe
A daily candlestick drop below $70,000 could trigger another sell-off episode toward the target of an inverted V-shaped pattern at $65,000, as shown on the daily chart below. This would represent an 11.4% drop from the current price.
BTC/USD 1-day chart. Source: Cointelegraph/TradingView
As Cointelegraph reported, after losing support at $74,000-$76,000, BTC may then descend to the support line near $70,500, which is likely to attract buyers.
