Over the weekend, Bitcoin had quite an explosive run reaching $68,000. It shot down like a bullet from a gun towards almost $400 million (more than $300 million in longs and just under $100 million on shorts) in liquidated leveraged positions within 24 hours of that initial dip (short-sell orders). What has happened to longs that believed Bitcoin would experience a continued upward spike in its recent run to $73,000, have been completely decimated after last week's close, causing the floor to collapse at a pace much quicker than their margin buffer could handle. This is an example of a liquidation cascade. Not one single, large trade going contrary to their bets, but rather a chain reaction through forced closing trade positions that cause the price to go down, which causes additional forced closing positions, and therefore down again. Thus, the liquidation of each long creates additional downward pressure on the already weaker market conditions. If the process continues until all of the leverage has been removed from the market, or until a new buyer base comes into the market and absorbs this massive sell order.Neither of these occurred in an orderly manner this weekend.<h2>Three Things Hit Simultaneously</h2>Testing the $68,000 price point was under considerable pressure from three separate sources all combining at one time, as a result, the market could not absorb all three pressures at the same time because of a lack of structural support. The negative 92,000 jobs in Non-Farm payroll that were reported in February will definitely cause unemployment to rise up to 4.4%. Also, inflationary pressures are continuing to build, and oil prices are still over $98 per barrel, both of which are examples of stagflation lite. During the March 2022 meeting of the FOMC, Powell had used a new name for these challenges; however, the market sees them all as one and the same. Risk assets do not wait for these definitions. The increase in the PPI for February<a href="https://www.bls.gov/opub/ted/2026/total-nonfarm-payroll-employment-down-by-92000-in-february-2026.htm" rel="noopener noreferrer" target="_blank"> </a>(0.7% month-over-month) was at least double what was expected to be released for February (0.3% month-over-month). Because the PPI typically leads the CPI by approximately 60-90 days, it is relatively safe to assume that as the PPI has been rising the CPI print for the month of March is already established; therefore, Horizon analysts suggesting that headline inflation for March is likely to be between 2.7% and 2.9% are not making alarmist assumptions, but are simply reporting what is happening in the system. The third larger source of inflationary pressure relates to the price of oil being greater than $98 at the time of the jobs report, trading at greater than $105 by week's end, while there continue to be unresolved supply disruptions in the Strait of Hormuz; this week's pricing is indicative of no relief from OPEC supplies in the future. Every week that crude oil continues to be at the elevated pricing levels seen currently increases the amount of inflationary pressure that will begin building as indicated by the PPI reading for the month of February.<h2>The 200-Week EMA and Why It's Not Working</h2>The Bitcoin 200-week EMA (exponential moving average) is currently at about $68,300. Historically (i.e., 2018, 2020, etc.), this has been a very reliable level of support for price action after periods of extensive time spent above it (i.e., previous to each cycle's respective local high). Many traders with long memories of such cycles initiated their positions at this level in anticipation of the same behavior in 2026. However, there hasn't been any such level of reliability in 2026 to date. As flagged accurately by analyst Rekt, the 200-week EMA is now unreliably prone to rapid price movements both down and up (and both ways have produced no definitive resolution). This lack of definitive resolution is a signal as well, showing that support levels that were once reliable enough to hold markets up fail to work when the macroeconomic landscape has shifted in a manner that causes historical price pattern recognition to fail. In March 2022, there were two death crosses created on the<a href="https://www.ainvest.com/news/bitcoin-68k-drop-1b-liquidation-cascade-2603/" rel="noopener noreferrer" target="_blank"> </a>Bitcoin daily chart. A death cross occurs when a shorter-term moving average crosses below a longer-term moving average. Two consecutive death crosses without a clear bullish reversal occurring between them is a very unusual market formation and while this does not mean that there will necessarily continue to be downward movement in price, it does eliminate a large portion of the probability distribution of recovery scenarios near the market's current pricing level.<h2>The Altcoin Damage</h2>Bitcoin's (BTC) liquidation value at the time of writing was approximately $132.79 million;<a href="https://theccpress.com/127198-crypto-traders-liquidated-24-hours/" rel="noopener noreferrer" target="_blank"> </a>Ethereum's (ETH) liquidation value was approximately $63.73 million. All other cryptocurrencies in the top 10 list of coins, including XRP and SOL accounted for the rest of this amount. More importantly, Ethereum's price finished the day below $2000, a key level for institutional investors' risk management desks when making allocation decisions for Ethereum. XRP's price closed at approximately $1.36. In general, the damage to the liquidations of other altcoin assets did not occur nearly to the same extent as bitcoin due their small leverage ratio; however the percentage declines in prices of all alts was nearly identical to, that is, all alts had similar, if not identical to, bitcoin's price drop. The second-largest liquidation event ever recorded in history occurred on the first day of a weekend in advance of the $400 million liquidation event, which is also the 15th largest liquidation<a href="https://www.coindesk.com/markets/2026/02/01/this-is-absolutely-insane-bitcoin-s-weekend-crash-exposes-the-cracks-beneath-crypto-s-latest-boom" rel="noopener noreferrer" target="_blank"> </a>event over the past 18 months, with the largest liquidation event ever occurred in March 2025, at which point over $1,700 million worth of assets were liquidated under duress. The key difference was that the $400 million liquidation event occurred on a weekend with little liquidity, fewer market participants actively participating in the market, and many more orders not being generated through traditional order books compared to when those same assets would have been liquidated without any restrictions being placed on their liquidation (i.e., during the time of week between Sunday and Wednesday).<h2>What the $65,000 to $68,000 Zone Means Now</h2>There are areas called zones where there is support found in price structures. In the $65,000-$68,000 range there are many technical references that meet together at this level — namely the 200 week EMA, the Fibonacci levels of retracement from the base of the 2024 rally, as well as many historical demand zones that occurred during the accumulation period of 2025. A closing price at or below $65,000 for several consecutive weeks would dramatically change the technical nature of this price range. The next major demand zone for price is estimated to be around $62,300,<a href="https://www.bitget.com/news/detail/12560605213487" rel="noopener noreferrer" target="_blank"> </a>which is the next upper level of major buying before entering new price discovery ranges completely. Now that the leveraged structure has been cleared it is up to the larger macro-economic universe to show up and provide a valid bid for price; it is uncertain at this time to have any method of representing this uncertainty via technical charts.

Bitcoin’s drop to $68K triggered $400M in liquidations, crushing leveraged longs in a cascade. Macro pressure, inflation, and oil-driven volatility exposed weak support and fragile market structure.


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