Bitcoin had a rough time of it lately — and that’s putting it mildly. The crypto dropped to $68,000 as the US-Iran conflict entered its third day, a brutal 47% slide from its $126,000 October 2025 peak. Over $300 million in crypto liquidations hit during the initial strike weekend alone. Not exactly a relaxing stretch.
The chaos didn’t stop there. A $1.5 billion liquidation trap wiped out all of Bitcoin‘s 2026 gains. Total crypto liquidations reached $3-4 billion in a single week, with $2-2.5 billion concentrated in Bitcoin futures. One particularly ugly day saw $19 billion in liquidations — the largest in crypto history. Bitcoin bulls lost $1.5 billion. Brutal, full stop.
Global macro wasn’t helping either. Japan’s government bond selloff triggered what markets started calling “Japanic,” dragging equities, US Treasuries, the dollar, and Bitcoin down together. Trump’s 10-25% tariffs on European goods added more pressure. Bitcoin’s options market saw puts outpacing calls. Investors with clearly defined risk tolerance thresholds may have been better positioned to avoid panic-driven decisions during this period of extreme volatility.
Even Iran missile strikes on US bases in Kuwait, UAE, and Bahrain piled on, briefly sending Bitcoin to $63,000 before a partial recovery to $69,000.
February 2026’s selloff registered at -6.05σ crash velocity. Severe, though still less extreme than COVID’s -9.15σ. The end-2025 drop alone erased over $1.2 trillion in crypto market value, with Bitcoin down 30%. Ninety-day realized volatility sat at 38 — rough, but half of 2022’s bear market levels above 70. So, relatively speaking, not a total meltdown.
Here’s the interesting part. Institutional demand hasn’t evaporated. Despite all the de-risking, structural support from institutional buyers persists. A quick US-Iran resolution could push Bitcoin toward $75,000-$80,000, fueled by ETF inflow reversals. Whale deposits exceeding $400 million into exchanges on January 20 signaled growing selling pressure from high-net-worth wallets amid the turmoil. February 2026 also saw $3.8 billion in net outflows from Bitcoin ETFs, reflecting the depth of bearish sentiment gripping institutional participants during the conflict.
Longer-term forecasts remain wildly optimistic — $120,000 to $170,000 based on ETF flows and supply constraints. Fundstrat even throws out $400,000+.
Some analysts argue that “Japanic”-style chaos might actually reinforce Bitcoin’s appeal as a non-sovereign asset. Falling rates and improved liquidity historically favor Bitcoin. Make of that what you will.
