Market Reset for Bitcoin as Liquidations Spark Capitulation Signals

Bitcoin this week breached a key psychological level, triggering a cascade of forced liquidations and underscoring broader systemic pressure rather than a single price move. On-chain metrics and miner economics point to a tightening squeeze across the network.

Exactly what happened on the selloff

• On February 11, the price slipped below $66,000. That break set off a wave of forced exits across the market: over a 24?hour span, leveraged positions were liquidated to about $394 million, with roughly $196 million coming from Bitcoin futures.
• The losses were concentrated in long positions with leverage, suggesting many traders underestimated the speed of the downturn.
• In the aftermath, the overall crypto market capitalization settled around $2.32 trillion.

Key takeaways at a glance:
- Total liquidations (24h): about $394 million
- Of that, Bitcoin futures: about $196 million
- Market capitalization afterward: about $2.32 trillion

On-chain signals: capitulation readings and who?s feeling the pain

On-chain statistics paint a picture of a clean-up rather than a routine dip. The seven-day average of realized losses sits at roughly $2.3 billion. Some analysts label this as one of the largest capitulation events in Bitcoin?s history, comparable to declines seen during the 2021 crash and the Terra/Luna collapse in 2022.

• The pressure has been strongest on newer market participants. The estimated cost basis for short-term holders sits at about $94,200, meaning a large portion of recent buyers are deeply in the red, which tends to amplify selling pressure during stress periods.

Miners and regulatory headwinds: pressure from both sides

Mining economics deteriorated as the selloff unfolded. Hashprice came in around $0.034 per TH/s. Fewer earnings for miners erode margins, especially for less efficient operators. This financial stress coincided with a notable regulatory shift: on February 9, mining difficulty was reduced by 11% after unprofitable miners exited the field?a historic adjustment tied to the current profitability squeeze.

Regulatory developments in parallel

• In the United States, SEC Chair Paul S. Atkins urged lawmakers to back the CLARITY Act in testimony before a Senate committee, aiming to establish clearer rules for crypto markets. This took place on February 12.
• In Europe, the European Banking Authority (EBA) unveiled new guidelines for crypto firms, targeting activities around E-Geld tokens and setting a deadline for services related to these tokens on March 2, 2026.

Current market backdrop

Bitcoin was quoted at about $66,195, trading near its recent lows and illustrating that the market is digesting the latest downswing but has not yet shrugged it off. Looking ahead, the EU deadline on March 2, 2026 for certain token services and ongoing CLARITY Act discussions in the U.S. signal that regulatory clarity remains an active theme alongside ongoing market dynamics.