Bitcoin Breaks Below $70K as Liquidations Hit and Miner Margins Tighten

Core Insights - Bitcoin experienced a significant decline, dropping below $70,000 and trading around $65,000 on February 6, 2026, following a volatile trading session with a range from approximately $60,300 to $71,700 [1] - The selloff is linked to a broader risk-off sentiment in the markets, exacerbated by the unwinding of leveraged positions, renewed concerns over mining profitability, and inconsistent Bitcoin ETF flows [1][3] - The $70,000 level was critical as it served as a crowded positioning zone, and its failure led to a mechanically driven decline characterized by accelerated liquidations and tighter miner economics [2][3] Market Dynamics - The selloff coincided with a broader de-risking trend, with the failure of the $70,000 level triggering liquidation events and forced selling, overshadowing any specific news [3] - The Crypto Fear & Greed Index dropped to 9, indicating "Extreme Fear," the lowest level in about 42 months, while options markets showed increased demand for downside protection [4] - Futures open interest decreased towards multi-month lows, suggesting that investors were more focused on hedging than taking on risk [4] Liquidation Impact - The recent price action reflects a leverage reset, where breaking a crowded level leads to rapid margin erosion and automatic position closures, resulting in market sell-offs [6] - During the selloff, liquidations exceeded $1 billion, indicating significant market pressure [7] - Mining economics have tightened, with hashprice falling to around $0.03 per TH/day, which is likely to pressure margins and increase operational stress for higher-cost miners [7]