Bitcoin tests $63,000 in ‘extreme fear’; full-blown capitulation yet to come: analysts

Bitcoin (BTC) and the broader cryptocurrency market extended their decline as traders sold in “extreme fear.”

According to The Block’s bitcoin price page, the world’s largest cryptocurrency fell to a low of $62,700 late Monday before making a recovery to $63,220 as of 1:30 a.m. ET Tuesday. In the past 24 hours, bitcoin fell 3.36%.

Major altcoins mirrored bitcoin’s extended drawdown, with ether dropping 2.5% to $1,828, XRP trading 1.5% lower at $1.33, and Solana falling 2.3% to $76.8. The overall market was down 3.42%, with the total crypto market cap slipping to $2.25 trillion.

“Bitcoin’s move below $63,000 appears to reflect a broad deterioration in crypto sentiment rather than a single fundamental catalyst,” said Min Jung, associate researcher at Presto Research. “In the near term, macro headlines, particularly around tariffs and renewed geopolitical uncertainty, are reinforcing a risk-off tone across digital assets.”

The Fear and Greed Index stood at 5 at the time of writing, marking one of the most bearish psychological environments in crypto history.

Deleveraging continues

Bitcoin saw a 4% pullback, sending its price below $65,000 on Sunday, with analysts attributing the downturn to a mix of “macro shocks” that rattled the already fragile market sentiment. Cited headwinds included violent riots in Mexico and U.S. pending home sales falling to a record low.

“What stands out, however, is that crypto has recently underperformed even as traditional risk assets have remained relatively resilient,” Jung said. “That divergence suggests this is not purely a macro-driven selloff, but also a function of weak marginal demand, thinner liquidity conditions, and continued deleveraging within crypto native markets.”

The trend is also evident in continued outflows from U.S. crypto exchange-traded funds. Spot bitcoin ETFs recently logged their fifth consecutive week of net outflows — the longest streak since March 2025. The funds extended that pattern on Monday, recording $203 million in net outflows, while ether ETFs saw $50 million withdrawn.

This trend is also spotted in the continued outflows from U.S. crypto exchange-traded funds. Bitcoin ETFs recently posted their fifth consecutive week of net outflows, which is a first since March 2025. The bitcoin funds continued this trend on Monday, reporting $203 million in daily net outflows, while ether ETFs saw $50 million in outflows.

Still, one analyst argued that the ongoing crypto selloff still largely reflects a leverage flush-out rather than a full-blown capitulation.

“We’ve seen massive long liquidations cascading through hundreds of millions wiped, negative funding rates sticking around, sharp drops in open interest, and clear bearish skew in futures,” said Andri Fauzan Adziima, Research Lead at Bitrue. “Short-term holders are getting smoked, but longer-term holders aren’t dumping en masse yet; on-chain HODL signals show some quiet accumulation amid the tactical de-risking.”

Critical zone

Adziima noted that the $60,000-$63,000 range is a critical support zone for bitcoin. If it holds at or above that level, the market could benefit from negative funding rates hurting short sellers, setting up for a classic post-flush squeeze. This could be bolstered by potential relief in macroeconomic conditions or ETF inflows returning, the analyst added.

On the other hand, a break below $60,000 could open the door to a move into the mid-$50,000 range or even as low as $47,000, as cascading liquidations accelerate under a worsening macro backdrop in a worst-case scenario, said Adziima.

“[Then] we could finally force some long-term holder capitulation, turning this into a deeper bear extension before the real cycle bottom,” Adziima told The Block. “I’d watch ETF flows and sentiment closely for signs it’s getting uglier.”