Bitcoin Falls to $60K Then Bounces Above $70K Feb.

Introduction

Bitcoin staged a violent sequence of moves in the past week — a rapid decline into the low $60,000s followed by a forceful bounce back above $70,000. Those swings were driven by concentrated selling pressure, significant liquidations, and reversals in exchange reserves and ETF flows. The episode highlights how liquidity dynamics and leveraged positions still amplify Bitcoin volatility even after the arrival of institutional products.

What moved Bitcoin this week

Steep drop then fast recovery

Starting the week near roughly $78,700, Bitcoin plunged to lows close to $60,000 on February 5 — a drop exceeding 10% intraday and more than $9,000 in dollar terms for the single day. That sharp decline erased a substantial portion of gains and contributed to a roughly $500 billion contraction in crypto capitalization across assets. By midweek, buyers stepped in and BTC recovered above $70,000, leaving traders navigating a wide and choppy range.

Price and volume data

Trading volume spiked during the rebound, with 24‑hour crypto turnover reported near $52 billion on the days of recovery, signaling strong participation from buyers. Yet that same period recorded outsized liquidations — estimates put total liquidations in the double‑digit billions (around $16 billion during the broader selloff window) — which magnified the decline when leveraged longs were forced out.

Flows and on‑chain signals

ETF outflows and exchange reserve shifts

Spot‑ETF dynamics played a material role: early‑February saw net outflows from spot Bitcoin ETFs (roughly $1.5 billion reported), coinciding with the price drop. Exchange reserves—total Bitcoin held on trading platforms—rose into the sell‑off (increased supply available to sellers) and then fell sharply during the rebound as coins moved off exchanges, suggesting accumulation into private wallets or custody after the rout.

Why these flows matter

Exchange reserves and ETF flows are real liquidity levers. When reserves climb, selling liquidity is easier and price declines can accelerate. Conversely, sustained outflows from exchanges reduce immediate sell pressure and can support rallies. In this episode the flip from higher reserves to net outflows helped fuel the midweek bounce once panic selling subsided.

Technical picture: levels that matter

Technically, the week reinforced a scenario of short‑term fragility but left clear price battlegrounds:

• Strong support zone: $60,000–$61,000 — tested during the drop and tied to long‑term realized price floors.
• Near‑term support: $65,000–$66,000 — a short‑term demand area where buyers defended positions during the bounce.
• Immediate resistance: $72,000–$73,500 — clearing this band would be needed to confirm the rebound.
• Further resistance rails: $75,000–$76,000 and then $79,000–$81,000 if momentum continues upward.

Momentum indicators flashed oversold on the downside (RSI dipping toward or below 30), which helps explain the swift relief rally. However, unless price retakes and holds above the mid‑$70Ks, risk remains skewed toward renewed volatility.

Implications for traders and allocators

Short‑term traders

For active traders, the week was a reminder that liquidity holes and forced liquidations can create sharp directional moves. Using smaller position sizes, staggered entries, and defined stop levels reduces the chance of getting squeezed in a fast unwind. Watching exchange reserve trends and ETF flows can provide early signals of incoming pressure.

Longer‑term investors

Longer‑term holders should treat the swing as volatility normality rather than a regime shift. The removal of coins from exchanges during the rebound—an accumulation indicator—suggests some investors used the dip to buy and move BTC into custody. Dollar‑cost averaging or opportunistic buys near the $60K band remain common approaches when liquidity briefly surfaces.

Broader context and takeaway

Macro headlines and safe‑haven flows also contributed to the narrative: gold surpassing $5,000 per ounce in the period drew attention away from crypto as some investors reallocated into traditional hedges. Importantly, the triggers for this week’s swings were concrete — ETF outflows, rising exchange reserves during the drawdown, and large leveraged liquidations — not speculative chatter. Traders should expect similar episodes while leverage and ETF flows remain significant ecosystem inputs.

Conclusion

Last week’s Bitcoin action combined mechanical pressure from ETFs and leveraged positions with real shifts in exchange supply, producing a rapid sell‑off and a swift volume‑backed bounce. Key price bands—$60K–$61K on the downside and $72K–$74K on the upside—will likely dictate near‑term sentiment. For market participants the lesson is consistent: manage leverage, monitor flows, and respect liquidity when sizing positions in Bitcoin’s still‑volatile environment.