Key Insights:
- Bitwise Europe highlights the potential for strong Bitcoin price gains if the market stabilizes from tighter US financial conditions.
- Bitcoin ETFs registered net daily inflows of $458.2 million on March 2, signaling institutional buyers absorbing market shocks.
- BTC price is trapped between the $70,500 shorts and $65,000 longs stacked.
Bitwise Asset Management Europe recently released a report, suggesting asymmetric upside for Bitcoin (BTC) price despite volatility. The report comes amid a resumption of inflows into the spot exchange-traded fund (ETF) market.
Despite the optimism, the 48-hour Liquidation Heatmap showed BTC price is trapped between two major liquidation pools.
The Bitwise Europe Bitcoin Price Analysis
In its latest report, Bitwise Europe shared a market analysis report, assessing Bitcoin’s move right after the major crash in early February 2026.
The report presents a cautiously optimistic view for Bitcoin (BTC) price. According to Bitwise Europe, despite fear from the sell-off, conditions now look favorable for potential upside.
This means the asset manager expects to see more gains than losses in the medium term, even if volatility remains high.
Indeed, Bitcoin experienced a severe capitulation event in February. Specifically, on February 5, 2026, BTC investors saw the largest nominal daily price swing on record, with an intraday range of about $10,200.
The BTC price crash stemmed from tighter US financial conditions, stalled liquidity, macro uncertainty, and forced liquidations.
Bitwise used on-chain and market data to show that the crash cleared a lot of weak positioning. For instance, the Supply in Profit metric revealed over 30% of circulating supply moved into unrealized losses during the drop. This is the 50th most severe monthly deterioration historically.
However, Bitwise highlighted that the overall assessment and performance outlook suggest crypto is shifting from capitulation toward a cyclical bottom. The firm emphasized that sentiment is historically low, valuations look attractive, and liquidity is gradually improving.
This creates an asymmetric upside risk-reward for BTC, according to Bitwise. In essence, Bitwise is saying there is potential for strong Bitcoin price gains if things stabilize.
Still, they acknowledged that near-term volatility, weak institutional flows, and macro headwinds could persist.
Bitwise Europe believes the early-Feb crash, although painful, is setting up attractive entry points amid improving macro liquidity.
Bitcoin ETF Resume Inflows
Notably, the Bitcoin price swings in February, alongside macroeconomic factors, also negatively impacted the spot ETF market.
The spot BTC ETF recorded days of consistent outflows. In a single day, the ETFs saw outflows of more than $200 million, while BTC slipped under $63,000.
The broader context around Bitcoin ETFs framed the decline as structural rather than cyclical. Market analyst Jackson argued that institutions became the marginal buyer during this cycle, replacing retail investors who drove prior rallies.
After a challenging February marked by net outflows amid a broader crypto sell-off, recent data shows renewed institutional interest.
According to Farside Investors, BTC ETFs have resumed inflows as Bitcoin climbed to around $66,000.
On March 2, the ETFs registered total daily net inflows of $458.2 million. This marks one of the largest inflow days of the quarter, signaling institutional buyers absorbing market shocks.
Bitcoin price was trading at $66,520, up 0.5% in the past 24 hours, with a market cap of $1.3 trillion.
Liquidation Heatmap and Implication
Amid the optimistic sentiments, CoinGlass released a post suggesting Bitcoin is in a high-risk, high-reward phase.
In the post, CoinGlass analyzed BTC’s move, using the 48-hour liquidation heatmap. CoinGlass described the Bitcoin price as trapped in a liquidity sandwich.
This is a situation where large clusters of leveraged positions sit on both sides. It creates potential fuel for sharp, directional moves once the price breaches one of the key levels.
Per the CoinGlass data, the Bitcoin (BTC) price is trapped between two major liquidation pools, the $70,500 shorts and $65,000 longs stacked.
A large volume of short positions, those betting on price falling, have liquidation prices clustered around $70,500.
If Bitcoin rallies strongly and breaks above this level, these shorts get liquidated. Thus, shorts must buy back Bitcoin to exit, creating buying pressure that can accelerate a further rally.
On the other hand, if the price drops sharply to $65,000, long positions get liquidated, forcing sales that add downward pressure.