This week, in the East 8 Time Zone, Bitcoin experienced a significant drop in a single day, briefly falling below the $70,000 mark, with a maximum intraday decline of approximately 7.8%, triggering intense market fluctuations. The contract market was hit hardest during this rapid correction, with approximately $948 million in liquidations across the entire network within 24 hours. The concentration of high-leverage long positions being cleared out amplified the downward price movement. At the same time, over $2.5 billion in cryptocurrency options will expire this Friday, combined with large on-chain transfers by institutions, further tightening an already sensitive market. The debate surrounding this drop below $70,000 is converging on one question: is this merely a deep pullback in a bull market, or a replay of the beginning of the bear market from 2021-2022?

7.8% Single-Day Plunge: Liquidations and Price Gaps

● From a technical perspective, Bitcoin had previously rebounded continuously above $60,000, nearly approaching the previous bull market high, just about $1,000 away from the historical peak, with market sentiment clearly leaning towards optimism. However, the subsequent rapid plunge directly pushed the price back below $70,000, forming a large solid long bearish candle on the chart, which constituted a technical setback for short-term bulls and shattered the consensus expectation of a "smooth new high."

● From a funding perspective, the destructive power of this correction is made evident by the liquidation data: approximately $948 million in liquidations within 24 hours, concentrated in high-leverage long positions, with some exchanges seeing liquidation volumes for longs reaching recent highs. The leverage chain was forcibly unwound in a short time, not only amplifying the downward inertia of the price but also concentrating the previously dispersed selling pressure in a very short time, further exacerbating the price gap.

● On the emotional level, the concentrated clearing of high-leverage long positions in futures has significantly cooled the previous confidence of "any pullback is a buying opportunity." As margin requirements were passively reduced and some accounts triggered forced liquidations consecutively, market discourse shifted from "buying on dips" to a more cautious "reduce leverage before discussing bottom fishing," with the long-short game returning to a phase of sensitivity to risk pricing.

$2.5 Billion Options Expiry: A Time Node for Long-Short Confrontation

● In terms of timing, over $2.5 billion in cryptocurrency options contracts will expire this Friday, creating an important time window under the current market conditions. A large number of contracts nearing settlement means that a portion of existing bets will soon be realized or go to zero, with both long and short sides adjusting prices in the spot and futures markets to optimize their expiry yield structures.

● Before and after the options expiry, spot and futures prices are often more easily rebalanced by large funds. For sellers, approaching settlement, they will reduce gamma risk through hedging operations; for buyers, they may adjust positions to bet on the direction of the "final push." These actions manifest on-chain and in the market as a sharp increase in short-term buy and sell orders, making the already fragile price range even more sensitive.

● Currently, investors are highly focused on whether the densely packed strike price areas will be "magnetized" as expiry approaches, amplifying short-term price fluctuations and raising implied volatility. If prices are pulled towards a key strike price range, the profit and loss structure of related positions will undergo drastic changes, forcing some institutions to accelerate adjustments to their hedging positions, thus forming a self-reinforcing chain of "volatility increase—position rebalancing—further volatility amplification."

BlackRock Fund Movements: 3,900 BTC and Institutional Stance

● On the on-chain data front, recently, BlackRock-related ETFs deposited 3,900 BTC and 17,197 ETH into Coinbase, which stands out during the price correction phase. As one of the largest asset management companies globally, such actions are often highly correlated with ETF subscriptions, custody, and market-making arrangements, providing an intuitive window to observe institutional preferences.

● It is important to emphasize that such a large transfer does not equate to a single-direction "buy" or "sell" signal; it may correspond to the preparation of spot assets needed for new subscriptions or relate to daily market-making and custody structure adjustments. For institutions that finely manage liquidity, concentrating adjustments in key price ranges is part of rebalancing and risk management, rather than a simple "dumping" or "bottom fishing."

● Nevertheless, the fact that institutions remain active during the price correction phase indicates that medium- to long-term funds have not completely chosen to "sit on the sidelines." The flows of ETF subscriptions and custody are gradually becoming key clues for assessing the stance of long-term funds: if there continues to be a significant net subscription and spot inflow, it will contrast with the deleveraging in the short-term contract market, reinforcing the narrative of "adjustment rather than bear market"; conversely, it would provide ammunition for the "top escaping" narrative.

Burry's Warning Resounds Again: A Comparison with the Last Bear Market

● Notable investor Michael Burry has once again spoken out, comparing the current Bitcoin correction to the price patterns seen in the early stages of the 2021 to 2022 bear market. His core argument is that, on the surface, both scenarios involved a seemingly "normal" pullback near historical highs, which then gradually evolved into a long-term downward trend. This comparison has rapidly amplified market anxiety on social media.

● However, the context of the current pullback is significantly different from the previous high-leverage deflation phase. In the last cycle, sectors like DeFi and NFTs were generally compounded with high leverage and high yield promises, leading to an extremely fragile on-chain credit structure; while this round also experiences leverage squeeze, the macro environment, depth of institutional participation, and derivatives structure have changed. Simply applying the "previous script" to the current situation overlooks the risks of market structure evolution.

● A more complex point is that the concentration of options expiry in this round, combined with ETF fund participation, makes the cycle structure more multidimensional than in 2021. In addition to traditional spot and perpetual contracts, the flows of options and ETF funds are also jointly shaping the price volatility path. Institutions adjusting positions between different tools, along with compliance constraints under regulatory frameworks, make the rhythm and depth of this cycle likely misaligned with the previous one, increasing the difficulty of judgment.

From Bull Market Peak Pullback to Narrative Shift

● Before this round of correction, on February 5, Bitcoin briefly regained the $60,000 range, just about $1,000 away from the previous bull market high, with the market generally discussing "when will it reach a new high" rather than "has it peaked." From this perspective, the drop below $70,000 appears more like a fierce correction of overly consistent expectations, also representing a common high-level pullback pattern before the peak of a bull market, opening up various possibilities for subsequent paths.

● On the narrative front, the movements of some established crypto capital are also changing. Kyle Samani has left Multicoin Capital to shift towards the AI and robotics field, which many view as a reflection of the partial transfer of funds and attention. Whether due to personal choice or in response to the trend, this shift at least conveys one signal: against the backdrop of diminishing marginal returns on "on-chain yields," some capital is beginning to bet more actively on a new round of technological themes.

● The extreme pullback of certain tokens presents a more intuitive way to showcase the brutal reality of rotation retreat. Taking PURCH as an example, its price has retraced over 90% from its historical high, with almost no one escaping the funds that chased it at high levels. Such cases reinforce the market's perception of "mainline switching" and "liquidity withdrawal": when the betting shifts from narrative to realization, assets lacking fundamental support and sustained demand can easily be ruthlessly discarded when overall risk appetite cools.

Correction or the Eve of a Bear Market: What to Watch Next

In the coming weeks, determining whether this round of decline is a deep correction in a bull market or the prologue to a new bear market hinges on the evolution of several signal lines. First, it is essential to continuously observe ETF subscriptions and institutional on-chain flows to assess whether long-term funds are still entering the market at this stage or beginning to systematically reduce positions; the former will support the path of "new highs after adjustment," while the latter will reinforce concerns about top formation. Second, attention should be paid to whether the implied volatility and overall leverage levels can significantly cool and stabilize after the concentrated expiry of options in this cycle; if prices can hold key support after deleveraging and volatility convergence, it will help restore confidence. Finally, the macro environment and regulatory progress remain the pricing anchors for longer cycles: whether it is the turning point of the liquidity cycle or the advancement of compliance frameworks, it will determine whether this time Bitcoin can follow a path different from that of 2021-2022. For participants, during a phase of rising uncertainty, it is more crucial to manage positions and rhythm rather than emotional judgments to cope with the potential next act.

Join our community to discuss and grow stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh

OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。