Bitcoin & Ethereum Drop, ETFs Face Losses Amid Market Volatility

TLDR: Bitcoin and Ethereum fall below key technical levels, triggering $1.7B in liquidations. U.S. Treasury confirms it cannot “bail out” Bitcoin or direct banks to increase holdings. Spot ETFs face unrealized losses, but most investor positions remain largely intact. Crypto funding continues selectively with TRM Labs, Flying Tulip, and Prometheum rounds. Recent analysis covers major shifts in digital assets, including sharp price drops, regulatory actions, and institutional responses affecting market flows and positioning. Crypto Market Downturn and Institutional Exposure Bitcoin fell below $65,000, while Ethereum dropped under $1,900, triggering $1.7 billion in liquidations within 24 hours. Most liquidations came from long positions, as leveraged traders exited rapidly across major exchanges. The market broke key technical levels, with Bitcoin falling under the 50-week moving average. Analysts used historical retracements to estimate downside, with targets ranging from $35,200 to $45,000. Alex Thorn from Galaxy Digital noted that past cycles showed drops below 50-week moving averages often tested the 200-week level near $58,000. Meanwhile, the cost basis for many institutional investors remained above current prices. Strategy Inc.’s average holding cost is around $76,000 per Bitcoin, while JPMorgan estimates mining costs at $87,000. WuBlockchain Weekly: Crypto market plunges as BTC breaks below $65K; Tom Lee responds to Bitmine’s $6.6B paper loss debate; U.S. Treasury says it won’t “bail out Bitcoin”; CFTC scraps ban on political prediction markets amid state crackdowns; BlackRock IBIT AUM falls from $100B… pic.twitter.com/k6gCN4kA2h — Wu Blockchain (@WuBlockchain) February 6, 2026 Spot Bitcoin ETFs are also under pressure, with average entry costs near $84,100 per coin. Despite a 25% unrealized loss, only a small portion of ETF assets has been withdrawn. Overall, the market shows lower liquidity, technical weakness, and elevated institutional stress. ETF inflo...