Bitcoin Fails to Hold Support: Is a Bigger Drop Next?

Bitcoin price fails yet another rebound to $70,000 which is a clear sign of structural weakness. BTC briefly touched $69,800 before dropping to the current $66,800. It is a decline from Monday's high of $71,500. 

BTC showed repeated rejection at the $70,000-$72,000 supply zone that formed a pattern of lower highs with decreasing bullish strength.

Liquidity Gap Increases Volatility Risk

Spot trading volumes are down roughly 30% since late 2025. It has created fragile price conditions that can produce outsized moves due to limited bid support on moderate sell orders.

Order-book heatmap displays a liquidity void between $66,000 and $60,500 as this zone contains limited active buy orders. 

The market currently holds more than $350 million of leveraged long positions near $60,500. This creates a higher possibility of a liquidation cascade if the market moves downward. 

Currently, Bitcoin is also trading below its 50-day and 100-day exponential moving averages. 

The relative strength index (RSI) is still below the neutral 50 level which suggests subdued buying pressure.

Analysts note that failure to reclaim $68,000 quickly could expose the $63,400-$64,600 support band and $60,000 may act as the primary structural floor.

Spot Demand Weakens as Capital Flows Turn Negative

CryptoQuant data further reinforces the lack of spot demand below $70,000. The 30-day cumulative new money flow has turned negative and it’s near $2.8 billion. The recent daily readings stay subdued at around $239 million. 

Unlike prior uptrends where price pullbacks attracted strong capital inflows, current price drops are failing to generate meaningful inflows.

Capital Outflows Signal Sentiment Shift

In the week ended February 6, digital asset investment products recorded $1.7 billion in net outflows. This pushed year-to-date flows into a $1 billion deficit. Bitcoin-focused products alone saw $1.32 billion withdrawn.

Exchange-traded funds (ETFs) have experienced nearly $2 billion in redemptions over the past month. 

These outflows force fund managers to sell underlying BTC holdings injecting additional supply into a market already constrained by low liquidity.

Assets under management across digital asset products have declined by approximately $73 billion since their October 2025 peak highlighting a wider structural retracement.

Also Read: Is Bitcoin’s Market Cycle Changing in 2026?

$60K: The Critical Technical Pivot

The 200-week moving average near $60,000 is the most crucial long-term support. A breakdown below this level would confirm a deeper correction with Fibonacci retracement targets near $57,800.

Unless ETF inflows resume or macro conditions shift to risk-on Bitcoin seems to be vulnerable within its current $60,000-$72,000 consolidation range.