Bitcoin (BTC) plunged to a 15-month low near $73,000, down roughly 41% from its October peak above $126,000, as more than $1.5 billion in leveraged long positions were liquidated in late January, triggering a cascade of forced selling that transformed a routine correction into the most severe short-term drawdown since late 2025.

What Happened: Liquidation Cascade Crushes Crypto Markets

Between Jan. 29 and 31, leveraged positions worth more than $1.5 billion were wiped out. The forced selling marked the largest single-day liquidation event since November 2025.

Once key support levels broke, margin calls and stop-losses accelerated the drop. Open interest in crypto derivatives has fallen roughly one-third over the past month.

Spot Bitcoin exchange-traded funds recorded net outflows of approximately $509 million on Jan. 31, signaling that institutional investors shifted toward risk reduction. The selloff coincided with a broader risk-off move in traditional markets, with major U.S. indices falling while gold and silver spiked 7% to 10%.

Also Read: Binance SAFU Fund Loads Up On $100M Bitcoin Within One Hour

Why It Matters: Market Tests Recovery Threshold

Analysts say the mid-$70,000 range now serves as a critical pivot.

Some research notes point to the $58,000 region, near Bitcoin's 200-week moving average, as potential deeper support if selling continues. Technical indicators remain bearish, with the momentum indicator at negative 12,152 and the MACD at negative 2,120 continuing to signal sell conditions.

If forced selling and ETF outflows ease while BTC holds above the mid-$70,000s, the current crash may prove to be a leverage reset. If liquidations stay elevated and price loses that zone, a more extended downturn becomes likely.

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