Thursday, February 5, 2026 — The cryptocurrency market is facing its most severe stress test in over a year as Bitcoin (BTC) hemorrhages value, crashing toward the critical $70,000 support level. In a chaotic 48-hour window, the world's largest digital asset has slumped to approximately $72,300, marking its lowest trading price since November 2024. The sharp correction is being fueled by a perfect storm of institutional capitulation, a massive $3.25 billion deleveraging event in derivatives markets, and bearish signals from Washington.

Institutional Confidence Shatters: The $2.9 Billion ETF Exodus

The primary driver of the current Bitcoin price crash February 2026 is an unprecedented retreat by institutional investors who were once the market's backbone. Data from SoSoValue and other on-chain analytics firms reveals a staggering exodus from US-listed spot Bitcoin ETFs. Over the last 12 trading days alone, these funds have recorded cumulative net outflows exceeding $2.9 billion.

Wednesday, February 4, proved particularly brutal, with funds shedding approximately $272 million in a single session. This marks a decisive shift in sentiment; the "buy the dip" mentality that characterized 2025 has evaporated. Analysts point to a critical profitability threshold as the cause: the average cost basis for many institutional ETF entrants sits between $84,000 and $90,000. With Bitcoin now trading nearly 20% below these entry levels, massive paper losses are turning into panic selling, creating a self-reinforcing feedback loop of Bitcoin institutional selling.

Deleveraging Crisis: $3.25 Billion Wiped Out

While spot selling exerts downward pressure, the derivatives market has provided the explosive volatility. A cascading cryptocurrency market deleveraging event has flushed out billions in speculative capital. According to Coinglass data, the broader market correction has triggered the liquidation of over $3.25 billion in long futures contracts over the past three weeks, with $740 million evaporated in just the last 24 hours.

The "Long Squeeze" Mechanics

The severity of this crash is attributed to excessive leverage. Market data suggests that virtually all leverage positions above 4x have been wiped out in this move. As prices broke through the $75,000 floor, liquidation engines on major exchanges like Binance and OKX automatically sold collateral to cover losses, driving prices deeper into the red. This "long squeeze" has stripped the market of its speculative froth, leaving price action entirely dependent on spot demand—which is currently non-existent.

Washington Weighs In: Scott Bessent Rejects "Bitcoin Bailout"

Adding macro-political fuel to the fire, comments from U.S. Treasury Secretary Scott Bessent have dashed hopes of federal intervention or support. In a heated testimony before the House Financial Services Committee on Wednesday, Bessent explicitly stated that the Treasury lacks the authority—and the inclination—to "bail out Bitcoin" or instruct banks to prop up the asset class.

While confirming that the U.S. government holds approximately $15 billion in seized Bitcoin (appreciated from an initial $500 million seizure value), Bessent clarified these are assets of forfeiture, not a strategic reserve intended to stabilize prices. This Scott Bessent crypto news sent a chill through the market, confirming that despite the changing political landscape, the "Fed put" does not extend to digital assets during this liquidity crunch.

Technical Outlook: Can Bitcoin Support Levels Hold $70K?

Traders are now glued to their charts, watching the Bitcoin support levels 70k. This zone represents a psychological and technical line in the sand. A decisive break below $70,000 could open the floodgates for a retest of the $60,000 region or even the $50,000 "max pain" level predicted by some bearish analysts.

  • Immediate Resistance: $76,000 (Previous support flipped to resistance)
  • Critical Support: $70,000 - $68,000 (200-week EMA confluence)
  • RSI Status: Deeply oversold, suggesting a potential dead-cat bounce, though trend momentum remains strictly negative.

With crypto market liquidations today continuing to roil the sector and institutional capital fleeing at a record pace, the path of least resistance remains downside. Investors are advised to exercise extreme caution as the market searches for a bottom in this high-velocity correction.