Bitcoin Claws Back Above $70,000 After Worst Day Since FTX Crash

Bitcoin rebounded above $70,000 on Friday after a sharp decline earlier in the week. The recovery came after the cryptocurrency fell below $60,000, marking one of its worst days since the FTX collapse in 2022. The price swings highlight the fragile state of the crypto market, where failed rebounds trigger further selling and deepen investor uncertainty.

Implied volatility reached 88.55, nearing levels observed during the FTX crisis, according to Bloomberg analyst Jamie Coutts. This volatility is evident in the surge of put options trading, as traders seek protection against further declines. The Volmex BVIV index, a crypto equivalent of the VIX, jumped from 56% to nearly 100% in a short span.

The Bitcoin volatility index reflects widespread panic and demand for downside insurance. The surge in put options trading on platforms like Deribit underscores the heightened risk perception among market participants.

Why Did This Happen?

The recent volatility reflects ongoing challenges in the perpetual futures market. As prices fall, liquidity drains, and forced selling becomes more common. This cycle has created a negative feedback loop that has deepened the bearish sentiment in the market.

Bitcoin's price has fallen from a peak of nearly $120,000 in October 2025 to below $60,000 in late February 2026. This decline has had severe consequences for institutional investors. Strategy, for example, reported a Q4 loss of $12.4 billion as the price of Bitcoin tumbled during the quarter. The company now holds 713,502 BTC at an average cost of $76,052.

How Did Markets React?

The Bitcoin decline has triggered broader market reactions. The RSI indicator fell below 20, signaling oversold conditions, while the MACD indicator remains bearish. Bitcoin's bounce above $65,000 on Friday suggests some short-term stability, though the long-term trend remains downward.

Other cryptocurrencies like Ethereum and XRP also experienced significant price declines. Ethereum fell below $1,900, while XRP dropped to $1.12 before recovering slightly. Analysts are watching whether these altcoins can stabilize or if the downturn will accelerate.

What Are Analysts Watching Next?

Traders are closely monitoring key support levels as Bitcoin trades near $65,000. A sustained recovery above $70,000 could signal improved sentiment and reduce the risk of further liquidations. However, if Bitcoin continues to fall below $60,000, it could trigger more margin calls.

Analysts are also tracking the behavior of large holders and corporate investors. If companies like Strategy or major mining firms face additional strain, it could exacerbate the downward spiral. The market is currently searching for signs of stabilization, but confidence remains fragile.

The broader macroeconomic environment also plays a role. Recent comments from President Trump and the nomination of Kevin Warsh as the next Federal Reserve chair have added uncertainty. Deutsche Bank noted that these developments have contributed to the ongoing sell-off in crypto assets.

The market has lost over $2 trillion in value since its peak in October 2025, with Bitcoin prices down 32% in the last 12 months. This decline has raised questions about the role of crypto as a speculative asset and whether it can establish a more stable position in global markets.