Key Highlights
- A stronger dollar, which typically accompanies such expectations, compounds the headwind for digital assets.
- The current dollar weakness, however, makes this decline even more painful. Microsoft's Azure growth disappointment added to the selling pressure, souring broader risk sentiment and triggering cross-asset contagion. The AI trade wobble demonstrated how crypto remains vulnerable to spillover effects from growth-sensitive technology sectors, particularly when positioning is stretched and liquidity is thin. Bitcoin declined from above $126,000 in early October 2025 to below the $75,000 level by early February 2026, showing sustained downward pressure over the four-month period. Leverage unwind amplifies declineCoinGlass data shows over $2.5 billion in Bitcoin liquidations in recent days, turning what began as a macro-driven selloff into a cascade of forced selling. Thin weekend liquidity exacerbated the selloff that began at $84,000 on Saturday, according to a Bitfinex note. The combination of macro triggers and leverage unwinding created conditions in which relatively modest initial selling pressure could force far larger moves, as stop-losses and margin calls compounded the decline. Additionally, institutional flows in 2026 have been uneven. Exchange-traded fund (ETF) inflows, often followed by outflows during volatility episodes, suggest tactical rebalancing rather than aggressive dip-buying, leaving prices exposed as liquidation pressure accelerates. US spot Bitcoin ETF flows showed net outflows on multiple days in January 2026 following inflow streaks, with the largest single-day outflow of $356.6 million recorded on Jan.
- 21. The absence of consistent institutional demand meant there was no meaningful buffer when forced selling began. Galaxy Digital research also noted that near-term catalysts appear scarce, with diminished odds of legislative progress on market structure acting as a narrative headwind. Without clear positive drivers on the horizon, traders lack the conviction to step in aggressively during drawdowns. Critical support and resistance levelsBitcoin now trades within a tightly watched technical range.
- The $73,500 level from 2024 and the Feb.
- 3 intraday low of $72,945 form the immediate support zone. IG Markets identifies a broader support band between $73,581 and $76,703, an area associated with prior cycle highs and 2025 lows that has been tested multiple times over the past year. CryptoSlate also identified several support and resistance levels for 2026 in Akiba's bear market analysis.
