Recent Bitcoin Dip Tests Traders
- Buster Wurm
- Feb 10
- 2 min read
Bitcoin’s latest bout of volatility has looked less like a single “crypto story” and more like a collision between leveraged positioning, thinner trading conditions, and a broader wobble in risk appetite.
After a powerful post-election run that pushed prices to record highs late last year, Bitcoin slid sharply in early February, briefly trading below levels that had become psychological support for traders. In one of the steepest down days of the move, the selloff intensified as leveraged bets were forced to unwind, sending liquidation totals above the billion-dollar mark over a 24-hour stretch and dragging the wider digital-asset complex lower.
A key accelerant has been “forced deleveraging," in which margin calls and exchange risk controls compel traders to close positions quickly, turning declines into cascades. Reuters also pointed to shrinking “market depth,” meaning fewer standing buy and sell orders near the current price. When liquidity thins, even moderate flows can cause outsized moves, which helps explain the sharp intraday swings investors have seen.
The Financial Times described the pullback as part of a wider risk-off wave that spilled over from tech stocks into crypto, with liquidations compounding the drop. It also noted that Bitcoin’s decline has erased much of the rally tied to expectations for a more crypto-friendly U.S. policy backdrop, as it has become clearer that policy progress is moving more slowly than bullish investors had hoped.
This episode has also underscored how closely Bitcoin trades with broader markets during stress. Reuters linked the downdraft to weakening risk sentiment across asset classes, such as turbulence in precious metals and tech shares, and to fresh macro uncertainty that can shift rate expectations and the dollar, both of which matter for speculative positioning.
What happens next will likely depend on whether liquidity returns and macro nerves ease. Traders will be watching whether spot ETF flows stabilize, whether funding rates and open interest cool to more sustainable levels, and whether Bitcoin can reclaim recently broken technical zones without another wave of forced selling. Until then, price action may remain jumpy, especially around major U.S. data releases and central-bank messaging that can quickly shift expectations for interest rates and risk assets more broadly.
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