Bitcoin (BTC) experienced a dramatic week of volatility, plunging below $60,000 before rebounding over 11% to trade around $65,976. The sharp decline, which erased over 50% from its October 2025 all-time high of $126,000, triggered massive liquidations and extreme fear in the market.
The sell-off resulted in over $2.58 billion in crypto market liquidations in a single day, with Bitcoin longs alone accounting for $1.1 billion. At one point, the Fear & Greed Index hit a yearly low of 9, signaling "extreme fear" among participants. Bitcoin also fell below its 200-day Simple Moving Average (SMA), a key technical indicator of a sustained weak trend.
Despite the panic, prominent market analyst Anthony Pompliano argues that such volatility is intrinsic to Bitcoin's long-term growth story. "Bitcoin is a volatile asset. It went from $0.01 to $126,000 in about 15 years. There were many 50-85% drawdowns along the way," Pompliano stated, noting that BTC has averaged a major decline every 18 months over the past decade. He emphasized that network activity remains steady and that long-term holders typically ignore short-term fear.
The rebound was fueled by significant institutional "dip-buying." Binance's Secure Asset Fund for Users (SAFU) purchased 3,600 BTC worth approximately $250 million at around $65,000 per coin. This is part of Binance's broader plan to convert $1 billion of its SAFU reserves into Bitcoin over 30 days, with an initial batch of 1,315 BTC bought earlier in the week.
Furthermore, data from Bitwise indicates increased exposure from crypto hedge funds. André Dragosch, European head of research at Bitwise, noted that the aggregate market beta for global crypto hedge funds reached its highest level in two years as Bitcoin weakened, signaling increased BTC market exposure. Record ETF volumes amid moderate net outflows also suggested substantial dip-buying by U.S.-based spot Bitcoin ETFs.
Traders are now closely watching the $58,000 to $62,000 zone, which aligns with the 200-week moving average, as a critical support level. Michael van de Poppe of MN Capital suggested that Thursday's record-volume price drop may have marked a capitulation low, potentially setting the stage for a recovery.
