Bitcoin took a sharp plunge on Thursday night, briefly trading below 61000 and printing an intraday low near 60,062 before rebounding toward the 62,000 area. The % move mattered as much as the level: a roughly 15% price drop in hours turned a slow bleed into a full sell-off, pulling the wider crypto complex deeper into a market decline. Traders who treated the asset as digital gold watched it behave like a high beta risk instrument, tracking the same fear cycle hitting tech equities and other speculative corners of the market.
The drawdown also rewired sentiment around practical use. Payment adoption remains thin, the inflation hedge narrative has weakened, and skepticism is growing fast among traditional allocators. The shift is visible in flow data: U.S. spot ETFs that were net buyers a year ago have moved into net selling in 2026, aligning with the broader de-risking wave. With forced liquidations piling up and key technical levels breaking, the question in trading rooms is no longer “when new highs,” but “where the next bid sits if liquidity keeps draining.”
Bitcoin plunge below 61000: what broke in the market structure
The move accelerated after Bitcoin lost the 70,000 handle, a level many desks treated as a psychological pivot. Once price slipped through, stop orders clustered under support fed the slide, and the overnight order book thinned, worsening slippage. The result was a fast wick toward the low 60,000s, followed by a mechanical bounce as short-term sellers took profit.
One recurring driver was liquidation pressure. When leveraged positions hit maintenance thresholds, exchanges auto-close them, creating market orders that amplify the drop. With more than $2 billion in crypto positions liquidated during the week, the selling became self-reinforcing, and the market decline spread from majors into mid-caps.
For readers tracking similar episodes, the pattern matches prior cascades where a single level break triggers cross-venue risk controls. A useful companion read is this breakdown of recent bitcoin price decline dynamics, which maps how momentum shifts when support fails.
Sell-off mechanics: liquidity, liquidations, and thin books
A sell-off in crypto often looks sudden, but it is usually a chain reaction. Spot selling pushes price into liquidation bands, derivatives engines close longs, and market makers widen spreads to manage inventory risk. That widening makes each subsequent market order move price more, which is why declines feel nonlinear.
A practical way to think about it is “who must sell” versus “who chooses to sell.” Forced sellers are price-insensitive, and they show up most when volatility spikes. The insight: when forced flow dominates, technical levels matter more than narratives.
Bitcoin, crypto skepticism, and the failed digital gold narrative
Bitcoin was marketed for years as a store of value, yet recent performance has tracked risk assets during macro shocks. Geopolitical flare-ups and policy uncertainty have pushed investors into cash and short-duration instruments, while crypto and high-growth equities moved in the same direction. For allocators who expected diversification, the correlation has been a costly surprise, and skepticism has hardened.
The contrast with metals is stark: over the past year, Bitcoin is down close to 40% while gold futures gained over 60%. The gap does not prove gold is “better,” but it shows where defensive flows went when portfolios sought stability. The key takeaway is simple: when the hedge claim fails in live conditions, positioning changes fast.
Policy headlines also shape belief systems. When regulation, taxation, and custody standards tighten, speculative demand cools, and stories lose lift. For more context on the policy angle and market perception, this overview of crypto policy wins and Bitcoin market reactions connects governance shifts to sentiment cycles.
Case study: a mid-size treasury desk switching from narrative to risk controls
A mid-size software firm treasury team, previously comfortable holding a small Bitcoin allocation, shifted its playbook after the recent price drop. Instead of treating the position as a long-term inflation hedge, it began managing it like a volatile risk sleeve: reduced sizing, added hard drawdown limits, and required liquidity checks before adding exposure.
The result was not “better predictions,” but fewer forced decisions. The insight: survival in a market decline comes from process, not conviction.
Cryptocurrency contagion: Ether and Solana signal broader market decline
The drawdown was not isolated. Ether fell sharply on the week, and Solana slid toward levels not seen in roughly two years, showing that the damage is systemic across cryptocurrency risk. When majors weaken together, it signals funding stress and a pullback in marginal buyers rather than a single-project problem.
This also changes how rebounds behave. Relief rallies happen, but they face overhead supply from holders looking to exit into strength. The takeaway: in a correlated sell-off, the first bounce often tests liquidity, not optimism.
It also helps to track how investors rotate during stress. Coverage like this report on bitcoin investors cashing out illustrates why exits cluster when confidence breaks and when price levels turn into headlines.
Tech stocks, macro risk, and why crypto traded like a beta asset
The latest leg down coincided with weakness in U.S. technology stocks, a common trigger for risk parity and multi-asset de-leveraging. When equity volatility rises, systematic funds often reduce exposure across correlated assets, including crypto proxies and listed vehicles tied to digital assets.
Gold and silver volatility did not provide relief either, leaving fewer “safe” havens and forcing many desks into cash. The insight: correlation spikes are the hidden tax during stress events.
Bitcoin technical levels after the price drop: 70000, 65000, and below 61000
Technicians focus on levels because they compress many decisions into one number. In this event, 70,000 acted as a trigger, and the 60,000 to 65,000 zone became the next magnet once selling intensified. A break under the 365-day moving average added fuel, since many trend systems reduce exposure when price trades below long-term averages.
Bitcoin is also more than 50% off the October peak near 126,000, which changes holder psychology. When an asset retraces that much, rallies often face heavier selling pressure from investors looking to get “back to even.” The insight: recovery requires not only demand, but time for supply to clear.
Quick checklist: signals traders watched during the plunge
- Break of 70,000 and speed of follow-through selling
- Liquidation totals and whether forced selling slowed
- Spot vs. perpetual futures basis and funding flips
- Order book depth around 65,000 and below 61000
- ETF flow direction as a proxy for institutional demand
- Cross-asset stress from tech stocks and dollar liquidity
The insight: during a sell-off, the best signal is often market plumbing, not social media sentiment.
Institutional flows in 2026 crypto: ETF selling and risk-off positioning
Institutional demand has shifted from accumulation to distribution, and that matters because institutions tend to trade size through regulated products. Reports of ETFs moving from heavy buying last year to net selling in 2026 align with the observed price drop and persistent market decline. When that flow reverses, it affects both spot liquidity and derivative hedging behavior.
Macro liquidity also plays a role. When dollar funding tightens or risk premia rise, leverage becomes expensive, and speculative positions unwind. The insight: capital cost often dictates crypto direction more than narratives.
For an additional angle on the broader unwind, this analysis of the bitcoin downward spiral links long-duration downtrends to structural outflows and trader positioning shifts.
Comparative snapshot: market impact during the sell-off
| Asset / Metric | Observed move | What it signaled | Why it mattered for the sell-off |
|---|---|---|---|
| Bitcoin | About -15%, briefly below 61000 | Support failure and liquidation acceleration | Triggered stops and pushed price into the 60k magnet zone |
| Weekly Bitcoin performance | Near -30% | Trend systems reducing risk | Reinforced the market decline narrative across crypto |
| Ether | Roughly -33% on the week | Broad cryptocurrency deleveraging | Confirmed contagion beyond Bitcoin |
| Solana | Near two-year lows around the high-80s | Risk appetite collapse in majors | Showed the sell-off was systemic, not isolated |
| Crypto liquidations | Over $2B in a week | Forced selling dominating flow | Made the price drop steeper and faster |
| Gold futures (1-year) | Up over 60% | Defensive rotation | Undermined the digital gold thesis and increased skepticism |
The insight: when multiple indicators align across assets, the path of least resistance stays lower until flows stabilize.
Our opinion
This Bitcoin plunge did not happen in a vacuum. The combination of a key level break, heavy liquidations, ETF outflows, and cross-asset risk-off pressure created the conditions for a sharp price drop and a deeper market decline across crypto. Skepticism rose because the store-of-value promise did not hold when portfolios needed it most.
The practical takeaway for readers is disciplined exposure management: position sizing that survives volatility, attention to liquidity conditions, and respect for long-term trend breaks like the 365-day moving average. The next phase will not be defined by slogans, but by capital flows, and that is where the signal now lives.