Bitcoin falls below $65,000: Tariff uncertainty triggers extreme market panic, short-term strategy focused on defense

Market Overview: All assets decline, panic sentiment intensifies

On February 23, 2026, during midday, the cryptocurrency market experienced a heavy plunge. Bitcoin's price plummeted, breaking below the key support level of $65,000, with a low of $64,232.8, a drop of over 5% in 24 hours. Mainstream cryptocurrencies like Ethereum, XRP, BNB, and others fell more than 6% on average, with Solana dropping over 8%. The market as a whole showed a broad decline, with the total crypto market cap decreasing by 4.7%, falling below the $2.3 trillion mark.

Market sentiment is extremely pessimistic, with the Crypto Fear & Greed Index dropping to 5-6, indicating "Extreme Fear." Derivatives markets suffered heavy losses, with over 130,000 traders liquidated in the past 24 hours, totaling $458 million in liquidations, with long positions accounting for over 90%.

Core Drivers Analysis: Macroeconomic Uncertainty Dominates Market

US Tariff Policy Fluctuations: Last week, the US Supreme Court overturned Trump's use of emergency powers to impose tariffs, but the Trump administration announced an increase in global tariffs from 10% to 15%, effective February 24. This policy tug-of-war has led to a loss of market direction, and Bitcoin's narrative as "digital gold" is being severely tested.

Inflation Data Surprises: The US December core PCE price index rose 3% year-over-year, exceeding market expectations, with a monthly increase of 0.4%, the largest in nearly a year. Meanwhile, the initial real GDP estimate for Q4 2025 grew at an annualized rate of 1.4%, significantly below the expected 2.8%. These data indicate that US inflation is facing headwinds, economic recovery momentum is weakening, and market expectations for Fed rate cuts are cooling further.

Funding Environment Continues to Deteriorate: Bitcoin mining company Bitdeer has liquidated all 943 BTC holdings, now holding zero. The US spot Bitcoin ETF has experienced nearly $1.2 billion in net outflows over the past three months, with capital withdrawal showing no signs of improvement. Exchange stablecoin reserves have shrunk by 14% over three months, indicating a severe lack of market purchasing power.

Technical Analysis: Key Support Faces Severe Tests

Bitcoin is currently in a clear downtrend, with weak technical signals. On the daily chart, prices have broken below all major moving averages, which are now in a bearish alignment. The $65,000 level was once a critical psychological support; now that it has been decisively broken, the next key support zone is around $60,000.

On the 4-hour chart, Bitcoin oscillated between $67,000 and $68,200 before breaking downward. Low trading volume indicates insufficient bullish momentum. The Relative Strength Index (RSI) is in a neutral zone, showing no signs of oversold rebounds or overbought corrections, marking a critical point for market direction.

Ethereum's trend is even weaker, currently forming a fragile support near $1,940, but with limited rebound strength. If it cannot hold the $1,935 support, further declines toward $1,900 or even $1,890 are likely.

Trading Strategy: Follow the Trend, Be Cautious

Given the current environment of "macro bearishness + technical weakness + low volume," the core trading principles should be "light positions, trend-following bearish bias, strict stop-loss, and avoiding bottom-fishing."

Conservative Strategy (suitable for most investors):

Bitcoin: Light short positions around $67,600-$67,800, with position size controlled within 8%, stop-loss at $68,500. Target at $67,000; if broken, reduce positions and aim for $66,500.

Ethereum: Light short positions around $1,955-$1,960, with position size within 8%, stop-loss at $1,980. Target at $1,935; if broken, hold for further decline to $1,920.

Aggressive Strategy (for experienced traders only):

Trade within narrow ranges with high-frequency entries and exits, strictly controlling position size within 5%, holding no more than 1 hour per position, and avoiding overnight positions. Bitcoin: $67,000-$67,800; Ethereum: $1,935-$1,960.

Risk Control Points:

- All orders must have stop-losses set, and these must be strictly enforced without arbitrary modifications or cancellations.
- Reject "bottom-fishing" mentality; no clear reversal signals are present, and the risk of long positions at low levels outweighs potential gains from short positions.
- Monitor tariff policy developments and US stock market trends; if sudden negative news causes rapid breakdown, close all positions immediately.
- Leverage should be controlled within 5x to avoid liquidation risks from compounded negative factors.

Market Outlook and Key Levels

In the short term, Bitcoin is likely to continue testing the $60,000 support. If it breaks below, a new wave of correction could begin, with targets around $58,000-$60,000. To reverse the bearish narrative, bulls need to push the price back above $70,000.

Notably, a classic divergence has appeared: retail panic versus institutional greed. The spot Bitcoin ETF still saw $88 million in net inflows on February 20, with BlackRock and Fidelity continuing to increase holdings. This divergence often signals a mid-term bottom formation, but confirmation awaits clear catalysts.

Key points to watch include: Fed policy statements, capital flows in US stock and Bitcoin spot ETFs, changes in global cryptocurrency regulations, and breakthroughs of key support and resistance levels. In the current extremely fearful environment, patience, risk management, and waiting for clear signals are the most prudent strategies.