Bitcoin Whiplash: $60K Flash Crash Flushed Leverage — Now Institutions Are Buying the Dip
A $3.3B leverage flush drove BTC to $60K, but institutional inflows and ‘strategic reserve’ rumors have sparked a V-shaped recovery to $71K.
Bitcoin reclaimed $71,000 Sunday, executing a violent V-shaped recovery just 72 hours after a liquidation cascade drove the asset to $60,000. The move marks a 50% drawdown from its October 2025 peak of $126,000, signaling a potential cyclical bottom rather than a terminal decline.
The $3.3 Billion Flush
The selloff that bottomed on February 5 was technical, not fundamental. Data from The Block confirms the crash wiped out $2.67 billion in leveraged positions within 24 hours, with total weekly liquidations topping $3.3 billion. This was a leverage reset, not an exit.
On-chain metrics support the capitulation thesis. Short-Term Holder SOPR (Spent Output Profit Ratio) dropped to 0.949, according to TradingView data. A value below 1.0 confirms that recent entrants, retail traders who bought the “Trump Top”, panic-sold at a loss, transferring coins to stronger hands.
Institutional "Crack at the Apple"
While retail capitulated, institutional desks aggressively bid the $60K–$70K zone. Bitwise CEO Hunter Horsley told CNBC that the correction offered allocators a "new crack at the apple". Entry prices they believed were gone forever.
"I think long-time holders are feeling unsure, and I think the new investor set, institutions, are sort of getting a new crack at the apple.", Hunter Horsley, Bitwise CEO
The flows back this rhetoric. After days of bleeding, BlackRock’s IBIT ETF registered $231.6 million in net inflows on Friday, reversing the trend exactly as price stabilized above $69,000.
The White House Wildcard
Adding fuel to the rebound is a resurfacing rumor reported by Forbes regarding the Trump administration’s strategic reserve plans. Speculation that the White House may utilize the drawdown to initiate sovereign accumulation has intensified, though no official executive order has confirmed the timing of such buys.
For now, the market has established $60,000 as a line in the sand. With leverage flushed and ETFs returning to net-buy territory, the path of least resistance has flipped back to the upside.
