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The crypto market took a sharp hit overnight, with Bitcoin falling below $65,000 and triggering a wave of forced liquidations across derivatives markets.
In just one hour, more than $230 million in leveraged long positions were wiped out. Over the past 24 hours, total crypto liquidations climbed to roughly $438 million, with Bitcoin accounting for nearly $89 million of that figure. The sudden cascade of selling intensified downward pressure and pushed prices lower across the board.
The broader crypto market is now down about 0.70% to $2.22 trillion, reflecting a clear shift into risk-off mode.
Macro Shock Sparks Sell-Off
The primary catalyst appears to be macroeconomic. On February 23, President Trump announced plans to raise global tariffs to 15%, citing trade imbalances. The news sparked immediate selling in equities, and crypto followed closely behind.
Data shows an 88% correlation between Bitcoin and the S&P 500 over the past 24 hours, confirming that this was not an isolated crypto event. Instead, digital assets reacted as high-beta risk assets, mirroring weakness in traditional markets.
Adding to uncertainty, investors are also watching upcoming Senate discussions on the CLARITY Act scheduled for February 25. Regulatory ambiguity continues to weigh on sentiment.
Extreme Fear and Market Stress
The Crypto Fear & Greed Index plunged to 11, signaling extreme fear. Historically, such low readings have appeared near market bottoms, including during:
- November 2018 (BTC near $3,500)
- March 2020 (COVID crash near $4,000)
- November 2022 (FTX collapse near $16,000)
While history does not repeat exactly, sharp fear spikes often mark periods of peak panic.
At the same time, roughly 46% of Bitcoin’s supply is currently underwater, meaning nearly half of holders are sitting on unrealized losses. Weekly realized losses across crypto have reached approximately $1.93 billion, the largest spike since 2022.
Levels to Watch
The immediate focus is Bitcoin’s ability to defend the $64K–$65K support zone. A sustained hold above this area could allow for a relief bounce toward $67K. However, a breakdown below support could open the door to a test of $60K–$62K.
Some analysts warn that if macro conditions worsen, a deeper capitulation toward $35K–$45K cannot be ruled out.
For now, the market remains defensive. The next direction will likely depend on macro developments, regulatory clarity, and whether buyers step in to absorb continued selling pressure.
