Bitcoin slide driven by broad de-risking and forced liquidations, not a single firm

Bitcoin’s recent decline reflects a prolonged de-risking cycle and forced liquidations rather than a coordinated sell-off by a single firm or exchange. Price had been forming lower highs and choppy consolidation since Q4, indicating gradual distribution by large holders through spot sales, leverage reduction and options strategies. The sharp February leg lower featured high volume and volatility consistent with margin calls and liquidation cascades after key support breaks; such disorderly moves point to widespread forced selling, not a smooth, single-actor dump. Analysts, including Bitwise CIO Matt Hougan, say selling stemmed from routine cycle timing, macro uncertainty and portfolio rebalancing. The peak-to-trough drop (~45%) sits within historical mid-cycle drawdowns following periods of heavy leverage and crowded positions. Signs of price stabilization and slowing selling suggest much forced unwinding may be complete, though sentiment remains fragile and a quick rebound is not guaranteed. For traders: monitor realized selling exhaustion, on-chain liquidation metrics, leverage and options flow to assess whether stabilization can lead to a tactical entry, and be wary of residual volatility during the transition from forced deleveraging to organic price discovery.