On February 24, the price of the leading cryptocurrency hit a local low of around $62,800, dropping nearly 5% in a single day.

At the time of writing, the price has recovered to $63,100.

Ethereum's price fell by 4.8% to $1,800, with the rest of the market following suit.

The total market capitalization of digital assets plummeted by 4% to $2.2 trillion. A popular market sentiment indicator is currently at 8, indicating a state of "extreme fear."

Analysts attribute this correction to geopolitical tensions, particularly the impact of news regarding U.S. tariff increases. Macro factors are heightening investors' risk aversion in digital assets, noted Min Zhong, a researcher at Presto Research, in a comment to The Block.

Critical Zone

Andri Fauzan Adziima, head of research at Bitrue, identified the $60,000-$63,000 range as a critical support zone for Bitcoin. If the price remains above or within this corridor, negative rates could "start to benefit the market," creating pressure on short-sellers and setting the stage for a classic squeeze following liquidations.

A macroeconomic improvement or a resurgence of inflows into ETFs could trigger a rebound.

However, if the price breaks below $60,000, it could drop to the $50,000-$55,000 range or even down to $47,000, Adziima predicted. In a negative scenario, cascading liquidations could accelerate due to worsening external conditions, potentially leading to the capitulation of long-term holders and prolonging the current correction until a true cycle bottom is formed.

Deleveraging

Zhong emphasized that cryptocurrencies are experiencing a deeper decline compared to traditional risk assets, which remain "relatively resilient."

"The divergence suggests that the sell-off is driven not only by macroeconomics but also by weak demand, low liquidity, and ongoing deleveraging in the crypto market," he added.

This trend is supported by ETF data: spot Bitcoin funds have recorded five consecutive weeks of outflows, the longest streak since March 2025.

However, a full-scale capitulation has yet to occur. According to Adziima, the current sell-off is primarily driven by deleveraging, as indicated by:

  • cascading long liquidations totaling hundreds of millions;
  • negative funding rates;
  • a sharp decline in open interest.

"Short-term holders are facing losses, but long-term holders are not yet mass liquidating; on-chain signals HODL indicate quiet accumulation amid tactical risk reduction," the expert stated.

It’s worth noting that in February, major speculators bet on a Bitcoin rebound, sharply reducing their short positions in the asset.