Bitcoin Crashes Below $70K as Institutions Abandon Ship

$70,000. For the first time since November 2024, Bitcoin crashed through this psychological barrier at 6:27 a.m. ET on Thursday, sending shockwaves through crypto markets worldwide.

The Two-Month Breakdown

Bitcoin's brief plunge below $70,000 lasted mere minutes before bouncing back to around $70,453. But this momentary collapse reveals deeper cracks in the crypto foundation that true believers don't want to acknowledge.

From its October peak of $126,000, Bitcoin now sits a staggering 40% lower. Other major cryptocurrencies like Ethereum and XRP have fared even worse. The straight-line bull run that many expected after institutional adoption? It's nowhere to be found.

Market analysts had long identified $70,000 as a critical support level. Its breach suggests more pain ahead, with some predicting a slide toward the $60,000-$70,000 range.

The Great Institutional Reversal

Here's the kicker: the very institutions that were supposed to provide Bitcoin with stability are now leading the exodus. CryptoQuant data reveals a stunning reversal—U.S. exchange-traded funds that purchased 46,000 bitcoins at this time last year are now net sellers in 2026.

"Institutional demand has reversed materially," the research firm noted. These aren't retail panic sellers—these are sophisticated investors with deep pockets and risk management protocols. When they move, markets listen.

The liquidation cascade tells the story. Over $2 billion in long and short positions have been wiped out this week alone, as leveraged traders get squeezed on both sides.

Technical Breakdown Signals Deeper Trouble

Beyond the headlines, technical indicators paint a grim picture. Bitcoin has broken below its 365-day moving average for the first time since March 2022—right before the last major crypto winter began.

The 23% decline over 83 days since breaking down is actually worse than the early 2022 bear phase, according to CryptoQuant analysts. This isn't just a correction—it's starting to look like a structural shift.

"Bitcoin isn't trading on hype anymore, the story has lost a bit of that plot," explains Maja Vujinovic, CEO of digital assets at FG Nexus. "It is trading on pure liquidity and capital flows."

The Liquidity Reality Check

Wednesday's tech stock sell-off filtered through to cryptocurrencies, highlighting Bitcoin's correlation with traditional risk assets. So much for being "digital gold" or an inflation hedge.

Meanwhile, actual precious metals are experiencing their own volatility, with silver plunging and gold under pressure. The entire alternative asset space is being repriced as investors flee to cash and government bonds.