Bitcoin sinks to 2021 levels as selloff deepens below $70,000

Bitcoin extended its selloff on 5 February, sliding below $70,000 and to levels last seen in late 2021, as selling pressure intensified across spot and derivatives markets.

At the time of writing, BTC was trading around $67,400, down more than 7.5% on the day, according to data. 

The move followed a sharp breakdown below the $72,000 support zone on 4 February, which had previously acted as a short-term floor during January’s consolidation.

Daily trading volume surged as prices fell, suggesting the move was driven by forced selling rather than thin liquidity.

The latest decline also confirms a broader bearish market structure that has been in place since Bitcoin failed to reclaim the $90,000 region earlier this year.

Source: TradingView

Bitcoin large holders reduce exposure into weakness

On-chain data points to large holders cutting exposure as the downturn accelerated. Arkham data shows that World Liberty Fi sold 73 WBTC, worth approximately $5.04 million, at an average price of $69,000.

The transaction occurred during the early stages of the breakdown below $70,000, indicating a defensive risk reduction rather than profit-taking near market highs. 

While the sale is not large enough to move the market on its own, it aligns with a broader pattern of capital rotating out of Bitcoin amid downside momentum.

On-chain sentiment deteriorates

Bitcoin’s adjusted Net Unrealized Profit/Loss [NUPL] metric has also continued to weaken. The indicator is now trending toward neutral and negative territory. It measures the aggregate unrealized profit or loss of market participants.

Historically, declines in NUPL toward zero or below have coincided with periods of market stress and capitulation, as holders move from unrealized gains into realized losses. 

Source: CryptoQuant

The last time average NUPL entered negative territory was in September 2023, during a prolonged corrective phase.

The current reading suggests that a growing share of the market is now holding Bitcoin at or below cost basis. This increases the likelihood of further distribution if prices fail to stabilize.

With former support now acting as resistance, Bitcoin faces a technically fragile setup in the near term. 

A sustained failure to reclaim the $70,000–$72,000 zone could open the door to further downside. At the same time, any relief rally is likely to be tested by overhead supply from trapped longs.

Final Thoughts

• Bitcoin’s drop below $70,000 marks a decisive breakdown to price levels last seen in 2021, reinforced by heavy volume and long liquidations.
• On-chain data shows large holders trimming exposure and unrealized profits compressing, pointing to mounting stress rather than speculative excess.