Bitcoin
$BTC slipped below $72,000 on February 5th as a combination of weak spot demand and cascading long liquidations accelerated the downside. The move wasn't driven by a single catalyst—it was structural pressure building across multiple layers of the market finally releasing.
Negative Coinbase premiums are significant because Coinbase typically reflects U.S. institutional and retail demand. When premiums turn negative, it means Bitcoin is trading cheaper on Coinbase than on other major exchanges, signaling that American buyers aren't stepping in while selling pressure dominates. That's a red flag for spot demand, especially when it persists across multiple sessions.
At the same time, long liquidations surged as overleveraged positions got stopped out. When Bitcoin moves quickly in one direction, it triggers margin calls and automated stop losses on leveraged longs. Those forced sales add momentum to the decline, creating a feedback loop where falling prices cause more liquidations, which push prices lower, which trigger even more liquidations. This is what deleveraging looks like when market structure is fragile.
What stood out to me is how these two dynamics reinforced each other. Weak spot demand meant there weren't enough buyers willing to absorb the selling pressure from liquidations. Without that bid strength, the decline accelerated rather than stabilizing. This is classic fragile market behavior—when leverage is high and conviction is low, downside moves happen faster and harder than they would in healthier conditions.
The psychological level of $72,000 breaking is also notable. Round numbers tend to cluster stop losses and algorithmic sell orders, so once that level gave way, it likely triggered additional selling from both technical traders and algos programmed to react to key thresholds.
Whether this stabilizes quickly or extends further depends entirely on whether fresh demand materializes at lower levels. Right now, the path of least resistance is clearly down.
#bitcoin #BTC #crypto #Liquidations #Marketstructure