Bitcoin’s Sudden Break Below $65,000: Inside the Tariff Shock, Flow Dynamics and Critical Technical Levels

The Move: 5% Down in Hours, First Clean Break of $65K

Over the weekend and into early Monday trading in Asia, Bitcoin slid more than 4–5%, dropping from the mid‑$67,000s to intraday lows around $64,300–$64,500, decisively breaking the psychological $65,000 handle. CNBC and Bloomberg both link the timing to President Donald Trump’s decision to raise his new global tariff from 10% to 15% just days after the Supreme Court struck down his previous emergency tariff regime, reigniting concerns about trade frictions and global growth.

Bitcoin Magazine’s market desk notes that most of the slide occurred within a two‑hour window on Sunday evening, accompanied by a sharp spike in traded volume and a clear shift from passive to aggressive selling. By the time Asian traders logged on Monday morning, BTC was fluctuating around $64,500–$64,800, having already erased roughly $3,500 in value in a single session. This flush comes on top of a broader drawdown that has left Bitcoin almost 50% below its late‑2025 peak above $126,000, underscoring just how brutal the current cycle has become. Forbes

Macro Triggers: Tariffs, Equities and “Tech‑Like” Behavior

The latest leg lower is tightly linked to macro headlines. After the Supreme Court curtailed Trump’s use of emergency powers for tariffs, the President immediately pivoted to a different legal tool to impose a new across‑the‑board levy—first at 10%, then at 15%—on a broad swathe of US imports. Bloomberg reports that this renewed tariff push rattled risk assets: US equity futures dipped, the dollar whipsawed, and Asian stocks traded nervously as investors digested the prospect of higher import costs and potential retaliation. YF

BTC has increasingly behaved like a high‑beta tech stock in this environment. Flow and macro studies from AInvest show that during the February sell‑off, Bitcoin’s declines closely tracked momentum‑stock drawdowns, with one February session flagged as the worst day for that equity factor since 2022. In that context, the tariff shock simply accelerated an existing risk‑off bias: traders treated Bitcoin less as an inflation hedge and more as a leveraged proxy for global growth and liquidity conditions.

Flow Dynamics: ETF Outflows, Whale Deposits and Liquidations

ETF Investors Keep Exiting

Under the surface, spot ETF flows have been deteriorating for weeks. AInvest’s breakdown of the early‑February sell‑off notes that U.S. spot Bitcoin ETFs saw $1.33 billion in outflows in the week ending January 23, the largest weekly redemption since early 2025, flipping year‑to‑date flows negative and signaling “structural de‑risking by major players.” Further weekly data showed continued net redemptions into early February, reinforcing the idea that institutions are using the ETF wrapper to exit smoothly rather than panic capitulate in derivatives.

Unlike the 2022 bear market, when price declines were accompanied by shrinking on‑exchange reserves as long‑term holders moved BTC into cold storage, February 2026 has seen on‑exchange balances rise into weakness, indicating increased sell‑side availability. In other words, more coins are being sent to exchanges for sale, particularly from ETF and large holders, helping to fuel the downtrend.

Whale Selling and a Mini Deleveraging Wave

Short‑term, the break of $65,000 coincided with renewed whale activity. Investing.com’s crypto desk reports that large holders moved significant amounts of BTC onto exchanges in the hours leading up to the drop, while perpetual funding rates shifted lower and net‑long positioning shrank. Reddit’s auto‑aggregated coinfeeds summary of the move highlights estimates of $230–$360 million in leveraged long liquidations over roughly 24 hours, with total crypto liquidations around $650 million over February 4–5 in the broader sell‑off window.

AInvest characterizes this as a “deleveraging spiral” rather than outright panic: leveraged trading amplified the move, but most of the size came from flow‑driven selling by ETF holders and whales rather than a complete collapse in bids. That nuance matters for the next leg — an orderly, flow‑driven sell‑off often stabilizes faster than a full margin‑call cascade, but it also means there may still be supply overhang as institutions continue to lighten up.

Sentiment: Extreme Fear and Defensive Funding

The broader mood around Bitcoin heading into this break was already fragile. Forbes recently noted that a popular crypto sentiment gauge was flirting with all‑time lows as BTC slid toward $65,000 earlier in February, describing the environment as one of “ongoing disruption” and investor fatigue. Changelly’s aggregated indicators show a Fear & Greed Index reading around 9–10 (Extreme Fear), with only 13 of the past 30 days closing green and realized 30‑day volatility near 11%.

Derivatives data backs up the idea of a market that has already been partially flushed. One hedge‑fund investor quoted by Forbes argued that “funding rates have become defensive, and leveraged long positions have mostly been eliminated,” calling the structure a “typical late‑cycle consolidation where excess risk is cleared out before the next major movement.” That makes the sub‑$65K zone look less like the beginning of liquidation and more like a test of whether spot demand can absorb ongoing slow‑motion distribution. Forbes

Advanced Technical Picture: Why $65K Matters

Key Levels: 2021 Highs, Power‑Law Bands and 365‑Day MA

From a higher‑timeframe technical perspective, multiple frameworks converged on the $65,000 zone as critical long before this week’s breakdown. Power‑law and cycle‑based analyses shared by veteran chartists identified roughly $65,000 as a “critical bear‑market threshold” for 2026 — a level where, historically, four‑year cycle drawdowns and logarithmic trend channels tend to find or lose major support. Separately, Binance Research recently highlighted that Bitcoin has been trading below its 365‑day moving average since November 2025, a line many analysts describe as the “demarcation between bull and bear markets.”

Bitcoin Magazine’s own weekly review points out that this latest slide cements several ominous milestones: six consecutive negative weekly closes, six straight closes below the 100‑week moving average, and three weekly closes beneath the prior 2021 all‑time‑high region. Taken together, these signals say the same thing: what started as a routine post‑high correction has evolved into a full test of the long‑term uptrend structure.

Order Blocks, Liquidity and the $60K–$65K Demand Zone

Zooming into the weekly and daily timeframes, technical strategists focus on a thick demand cluster between roughly $60,000 and $65,000. MEXC’s February 22 daily note calls $67,500 immediate support with $65,950 as the “key invalidation point” for the current bullish thesis; below that, bulls lose control of the local range and a sweep toward the $60,000 liquidity pool becomes plausible. Bloomberg cites BTC Markets’ Yael Lucas as flagging $65,000 as the “crucial support level” and warning that “a significant drop below that level would bring $60,000 into consideration,” while bulls must reclaim $70,000 to change the narrative.

Technicians using Wyckoff and liquidity‑mapping frameworks see the $60K–$65K pocket as a major “order block” carved out during the prior impulse up: a zone where large players previously accumulated and where resting bids and stop‑loss clusters are now thick. The weekend breakdown looks, in that lens, like a classic liquidity sweep: price punctures the first layer of support under thin conditions, triggers stops and margin calls around $65K, and then searches for fresh demand closer to $60K before a potential reversal.

Trend Structure: Lost Trendline and Weekly Market Structure Break

Recent video work from prominent chartists emphasizes that the long‑term trendline from the 2022 lows — a structure that had held for years — has now been cleanly broken. On a de‑cluttered weekly chart, BTC has lost both that ascending support and the horizontal band around the old 2021 highs, putting price into a classic “market structure break” scenario: lower highs confirmed, key support failed, and the next logical targets sitting at prior consolidation areas around $67K, then $56K if weakness persists.

This does not guarantee a waterfall, but it does mean that from a pure trend‑following standpoint, Bitcoin is in a downtrend on daily and weekly timeframes. Bulls now need to defend remaining support zones and print at least a higher low above $60,000 followed by a reclaim of $70,000–$71,000 to flip structure back to constructive.

On‑Chain and Mining: Stress, But No Full Capitulation (Yet)

On‑chain, the picture is mixed. AInvest reports that on‑exchange reserves have risen into the February decline, suggesting more active distribution, but long‑term holder metrics still show net accumulation on dips rather than outright dumping. Derivatives positioning is lighter after several waves of liquidations, aligning with the idea of a partially de‑levered market with room for both sharp squeezes and further grinding downside depending on flows.

Mining metrics, however, are flashing stress. Hashrate has dropped around 20% from recent highs, and hashprice — revenue per unit of hashrate — fell to an all‑time low near $33.31 per PH/s per day earlier this month, below the estimated $40 breakeven for many rigs. The network responded with an 11.16% difficulty reduction on February 8, the largest negative adjustment since China’s 2021 mining ban, reflecting real economic pain for less efficient operators. If price continues to hover around or below $65,000, more miner selling or shutdowns could add to medium‑term supply pressure.

Scenarios from Here: Bounce, Grind or Breakdown

With BTC now trading under $65,000, scenarios cluster around three paths. In the bullish case, the move is a final liquidity sweep: price dips into the $60K–$65K order block, ETF outflows slow, whales resume net accumulation and a relief rally drives BTC back above $70,000, turning this breakdown into a bear trap. Given extreme‑fear readings and washed‑out funding, this is not impossible — but it requires a clear improvement in macro sentiment, particularly around tariffs and equities.

In a neutral “grind” scenario, BTC continues to oscillate between roughly $60,000 and $70,000 for weeks, as ETF outflows and spot demand roughly offset, miners slowly adjust to lower revenues, and traders chop between over‑sold and over‑bought conditions on lower timeframes. This would mirror prior late‑cycle consolidation phases where the market moves sideways in a broad range while leverage and narrative reset.

In the bearish extension, Bitcoin fails to hold the $60,000–$65,000 cluster, ETF redemptions accelerate on further macro shocks, and the market reprices toward deeper weekly support around the mid‑$50,000s highlighted by several long‑term chartists. That path would likely require either a more severe global risk‑off episode or a narrative shock specific to crypto, but with structure already weakened, it cannot be dismissed.

Bottom Line: $65K Break is a Warning, $60K is the Line in the Sand

The sudden drop below $65,000 is more than just another red candle: it is a clear test of a zone that technical, macro and sentiment frameworks have been telegraphing for months as critical for this cycle. Tariff uncertainty, ETF outflows, whale distribution and a cracked long‑term trendline all converge to make the $60,000–$65,000 band the market’s new battlefield.

For traders and investors, the message is simple: respect the technical damage, monitor flows and macro headlines closely, and treat both breakdowns and sharp bounces with caution in a structurally high‑volatility regime. Until BTC either reclaims the $70,000 region with convincing volume or loses $60,000 on a weekly close, the only certainty is that this part of the cycle will be remembered less for euphoria and more for how the market handled stress at one of its most important support zones.