 ▲ Bitcoin (BTC) crash / ChatGPT-generated image |
Bitcoin (BTC) is showing early warning signs of a large-scale capitulation event that previously devastated the market, prompting a strong warning that a breakdown below key support levels could recreate the brutal crashes of 2018 and 2022.
According to crypto media outlet The Daily Hodl on February 23 (local time), crypto analyst Justin Bennett stated that Bitcoin is currently standing at a highly precarious technical inflection point. Bennett warned that if Bitcoin fails to hold its critical support level, it faces a significant risk of entering a capitulation phase, where market participants panic and dump their assets. He noted that the current chart structure bears a striking resemblance to the periods just before the market collapses in 2018 and 2022, further heightening investor anxiety.
The decisive line in the sand identified by Bennett is the $65,000 level. This zone serves as both a psychological support level and an area with substantial buy orders. If breached, it could trigger a chain reaction of forced liquidations, accelerating the downward move. “If Bitcoin firmly closes below $65,000, it would signal the entrenchment of a downtrend,” Bennett emphasized. “Based on past cases, a capitulation event can unfold much faster and more violently than expected.”
From a structural perspective, retail investor sentiment has sharply deteriorated, while whale activity is showing unusual patterns. According to Santiment data, large wallet addresses have been transferring significant amounts of Bitcoin to exchanges, suggesting profit-taking or risk management efforts. This indicates that with weakened market support, a surge of heavy selling pressure could trigger extreme turmoil similar to the onset of the 2022 Luna collapse or the prolonged downturn that began in 2018.
Stagnant capital inflows through spot Bitcoin ETFs are also adding to downward pressure. Institutional investors appear to be holding back on aggressive buying amid unresolved macroeconomic uncertainty and geopolitical risks. Bennett described the current market environment as the calm before the storm, warning that if support levels break, massive liquidation volumes could rapidly drain market liquidity.
The crypto market is expected to determine this week—amid a wave of economic data releases and policy changes—whether history will repeat itself or a new support base will be established. Bitcoin’s long-term trajectory is likely to shift significantly depending on whether it can defend the $65,000 level. Investors are advised to closely monitor changes in technical indicators and the movements of major whales while strengthening risk management in preparation for worst-case scenarios.
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