Bitcoin sinks below $65,000 as macro shocks rattle fragile market: analysts

Bitcoin (BTC), ether, and other major cryptocurrencies experienced a significant dip on Sunday evening, triggering hundreds of millions of dollars in liquidations within a single hour.

At around 7:20 p.m. ET, bitcoin commenced a sharp decline from $67,600 to current levels near $64,700, dropping over 4% in less than two hours, according to The Block’s price page.

Other major cryptocurrencies mirrored bitcoin’s decline — ether dropped 5.77% in the past 24 hours to $1,861, XRP fell 6.42% to $1.33, and Solana saw a steep 8.3% decline to $77.6.

The decline worsened as several hundred million dollars in long positions were liquidated. According to Coinglass’s heatmap based on available data, close to $360 million in long positions were liquidated in the past hour, leading up to 8:57 p.m.

“This is a confluence of macro shocks hitting a market that was already fragile,” said Rachael Lucas, crypto analyst at BTC Markets. “Geopolitical chaos out of Mexico is rattling risk appetite globally, and the worst pending home sales reading ever recorded in the U.S. has compounded the nervousness.”

Macro shocks

Mexican security forces have killed Nemesio “El Mencho” Oseguera, leader of one of the largest cartels. His death sparked eruptions of mass violence across the nation, prompting international airlines to suspend flights to Mexico.

Meanwhile, pending home sales in the U.S. dropped 0.8% in January to an all-time low of 70.9 since tracking began in 2001, signaling increased economic uncertainty in the U.S. markets.

These events came as President Donald Trump announced he would raise the blanket 10% tariff on all U.S. imports to 15%, a move he had originally announced after the Supreme Court ruled that his emergency tariffs were unlawful.

The added layer of uncertainty from Trump’s latest announcement has led Wall Street futures and the dollar to slide, Reuters reported.

“Bitcoin was already carrying five consecutive weeks of ETF outflows and spot volumes down 59% week on week, so the liquidity conditions to absorb a shock like this simply were not there,” Lucas said. “This is not a bitcoin-specific story. It is a risk-off story that bitcoin is absorbing first.”

Kronos Research CIO Vincent Liu also mentioned the Japanese yen’s sharp surge on the back of speculation that the Bank of Japan is preparing for a policy shift toward further monetary tightening. The surge forced funds to deleverage, worsening the sell-off in risk assets globally.

Watch for relief

“Watch $60K for support — On the upside, reclaiming $65–66K could stabilize BTC, with $70K signaling a rebound but highly dependent on macro flows,” Liu said. “Relief could come from renewed ETF inflows, clearer regulatory signals, or Thursday’s initial jobless claims, which may provide insights or at minimum, a relief bounce.”

BTC Markets’ Lucas said the underlying picture for the crypto market is not “uniformly bearish,” mentioning that whales added 200,000 BTC over the past month. The analyst also cited bitcoin’s short-term Sharpe ratio recently hitting -38.38, a level seen during cycle lows in 2015, 2019, and 2022 before a significant recovery.

“On the catalyst side, the CLARITY Act moving through the Senate would provide the regulatory certainty the market needs to draw institutional capital back in,” Lucas said. “The setup is there. The timing depends heavily on how quickly macro uncertainty resolves.”