Bitcoin’s slide toward $60,000 in February 2026 marked one of the sharpest deleveraging phases of the current cycle. A new report from Finestel says the selloff triggered large-scale capitulation on-chain, but professional asset managers did not abandon crypto outright. Instead, they raised stablecoin allocations, reduced leverage, and bought selectively as prices recovered.
According to the report, BTC started the month near $78,600, briefly reached $79,300, then lost the key $74,500 support and fell into the $60,000 to $62,000 range between Feb. 5 and Feb. 8. Intraday swings topped 25% during that stretch. On a monthly basis, Bitcoin fell about 12.8% and posted its sixth consecutive weekly red close. Ethereum moved in the same direction, dropping from roughly $2,550 to $1,800 before recovering to around $2,150, leaving it down 15.7% for the month. Total crypto market capitalization declined from about $2.95 trillion to a low near $2.41 trillion.
On-chain data points to a major capitulation event
Data from Glassnode and other analytics firms suggests this was far more than a routine pullback. During the crash, about 641,000 BTC moved at a loss, making it the second-largest single-day realized loss event on record. Of that selling, 77.5% came from short-term holders, largely investors who bought between $75,000 and $97,000 and exited as the market fell.
The move also created what the report describes as a liquidity vacuum between $70,000 and $82,000, where relatively few addresses now hold cost basis. That matters because any rebound into that area could meet heavy selling from trapped buyers trying to get out. At the same time, the $63,000 to $64,000 zone emerged as an important support shelf. Finestel noted that U.S. spot Bitcoin ETFs turned to $787 million in net inflows in the final week of February, a sign that institutional buyers stepped in while retail participants reduced risk.
Macro pressures drove the February flush
Finestel attributes the sharp decline mainly to macro developments. The report says U.S. President Donald Trump’s nomination of hawkish policymaker Kevin Warsh as the next Federal Reserve Chair strengthened expectations for tighter policy, higher real rates, and slower balance-sheet support. Those conditions are typically negative for liquidity-sensitive assets such as Bitcoin. Sticky inflation, stronger-than-expected labor data, and a blanket 10% U.S. import tariff added to fears of a more stagflationary and trade-fractured environment.
Sentiment improved late in the month after Nvidia’s Feb. 25 earnings. The company reported record quarterly revenue of $68.1 billion, up 73% year over year, which revived the AI trade and lifted U.S. equities. Bitcoin then moved back toward $70,000 on Feb. 26.
Professional managers shifted into defense, not exit
Professional capital responded by becoming more defensive rather than leaving the market. Finestel’s February allocation data shows core BTC and ETH holdings edged up to about 53% to 53.5% of portfolios, reflecting a move toward higher-quality assets. At the same time, leverage was cut to around 1.1x to 1.2x, while value-at-risk was tightened from roughly 7% to 6%.
The clearest change came in stablecoins. Their portfolio share rose to nearly 25%, while velocity fell 22%, indicating managers preferred to hold dry powder instead of chasing every bounce. Exposure to DeFi and RWA was reduced by about 1 percentage point, though some capital rotated into better-collateralized real-world asset strategies. Finestel estimates that this approach mitigated roughly 70% of the drawdown managers might otherwise have faced.
Derivatives markets reflected the same defensive stance
Derivatives data moved in the same direction. Implied volatility climbed about 35% around the Nvidia earnings and FOMC window. In March expiries, puts accounted for roughly 65% of positioning, while futures open interest dropped about 22%. More than $4.8 billion in positions were liquidated, mostly longs. Traders shifted toward hedging and defined-risk options structures instead of leveraged directional trades.
The report says the next key markers are the March 18 FOMC meeting, expected to keep rates near 3.5% to 3.75% while updating the 2026 dot plot, and the March 13 CPI and PPI releases. Tariff developments and geopolitical tensions remain in focus as well. Finestel says those factors will determine whether $60,000 holds as a cyclical floor or breaks toward $55,000. If the Fed surprises on the dovish side, growth data comes in better than feared, and U.S. tokenization rules make progress, BTC could recover toward the $70,000 to $100,000 range by quarter-end.