Bitcoin's $60K Breakdown: Flow Mechanics of a Deleveraging Event

Bitcoin's sell-off has been severe and sudden. The price fell as low as $60,062 this week, marking its lowest level since October 2024 and a drop of more than 52% from its record high of $126,000 hit in early October 2025. This crash was not a gradual decline but a violent one-day bloodbath, with the token shedding more than 15% on a single session earlier in the week.

Sentiment has collapsed into extreme fear. The Crypto Fear & Greed Index fell to a score of 9, its lowest level in over three and a half years, signaling a market gripped by panic. This isn't a reaction to a crypto-specific failure, but a macro-driven deleveraging tied to positioning and risk appetite. The market is liquidating leveraged longs at scale, with over 588,000 traders liquidated for $2.7 billion in a single day.

The first clear sign of capital outflow is emerging from the ETF channel. As investor appetite fades, the iShares Bitcoin Trust has posted net outflows of about $34 million through Wednesday. This institutional selling, coupled with the ETF's shares plunging more than 13% on Thursday, confirms a shift in sentiment. The setup is now one of a liquidity-driven deleveraging event, where fear triggers a cascade of forced selling.

The Deleveraging Engine: Amplifying Flows

The sell-off accelerated into a frenzy, with flows amplifying the price collapse. The iShares Bitcoin Trust (IBIT), the largest ETF, plunged more than 13% on Thursday, its steepest drop since August 2024. This sharp price decline in the ETF, which serves as a proxy for institutional sentiment, directly dragged down the underlying bitcoin market and triggered a wave of forced selling among leveraged longs.

Trading volume exploded, confirming the chaotic nature of the deleveraging. The total crypto trading volume hit $356 billion, the highest in months. This frantic activity reflects a market where capital is being rapidly reallocated, with investors rushing to exit positions as losses mount. The scale of outflows from spot ETFs further illustrates the capital flight, with funds seeing $434 million in outflows on a single day.

Technically, the market broke a key long-term support level, deepening the bearish signal. Bitcoin collapsed below the 200-week exponential moving average, a classic indicator of a sustained bear market. This breakdown removed a major psychological and technical floor, encouraging further selling and locking in losses for a growing number of holders who are now underwater. The combination of a plunging ETF, record trading volume, and a broken technical signal created a self-reinforcing cycle of deleveraging.

Catalysts and Stabilization: Flow Triggers and Levels

The immediate base for bitcoin is forming in the $54,000–$60,000 range. This zone, anchored by the 200-day moving average, represents the likely floor for a stabilization phase. For this base to hold, the market needs a shift from capital flight to capital retention. The critical flow trigger for that shift is the ETF channel. Sustained outflows confirm the deleveraging narrative, but a reversal to inflows would be a direct signal that institutional sentiment is bottoming and could spark a recovery.

The key technical level to watch is $70,000 support. Bitcoin broke below this level on Thursday, and a failure to reclaim it would likely trigger further momentum selling. This breakdown removes a major psychological and technical floor, encouraging more selling from traders who are already underwater. The market's ability to rebuild solid technical support is the core condition for stabilization, which in turn depends on an improvement in global financial conditions.

The flow narrative is now one of exhaustion. The record $3.2 billion in entity-adjusted realized losses signals a wave of capitulation, where traders rushed to exit as prices plunged. This extreme loss-taking often precedes major bottoms, but the path from here is dictated by flows. Until ETF flows turn positive and the price holds above the $54,000–$60,000 base, the risk remains skewed toward further downside.