Bitcoin Drop to $69,000 Triggers DeFi Liquidations

Bitcoin dropped to about $69,000 before bouncing after U.S. lawmakers passed a bill that eased shutdown risk, while DeFi liquidations still reached about $30 million. At the same time, macro signals around the dollar and liquidity continued to shape risk sentiment across crypto.

Bitcoin bounce follows shutdown bill clarity as DeFi leverage unwinds

Bitcoin slid to about $69,000 and then rebounded after U.S. lawmakers passed a bill that removed immediate shutdown risk, according to Santiment. The bounce came fast, but it did not erase the volatility that hit leveraged positions across DeFi.

Santiment said the move still triggered about $30 million in DeFi liquidations. In other words, traders got forced out as price snapped lower, and then price lifted once the headline risk eased.

The liquidation chart shows that pattern clearly. Liquidation bars stayed quiet for long stretches, then jumped during the sharp drop, with the largest spikes clustering around the steepest part of the selloff. After that flush, liquidations cooled as Bitcoin stabilized and bounced.

At the same time, DeFi total stablecoin debt fell alongside price. That combination usually signals deleveraging: borrowers reduce exposure, positions close, and the system carries less outstanding debt even after price recovers. The chart shows stablecoin debt stepping down through the decline and then failing to return to prior highs during the rebound, which points to a more cautious leverage profile after the shakeout.

A separate Santiment comparison chart shows Bitcoin moving with U.S. equities during the risk-off leg, while gold held firmer and pushed higher. Then, as equities started to recover off the dip, Bitcoin also climbed from the lows. That split matters because it frames the bounce as a risk-asset reaction to macro clarity, while gold kept its own bid as a hedge during the same window.

Overall, the snapshot shows a market that bounced on policy relief but still paid a leverage cost. Liquidations and falling stablecoin debt suggest the rebound started after forced selling cleared, not after leverage rebuilt.

Cowen flags DXY turning point risk as he pushes back on “supercycle” Bitcoin calls

Crypto analyst Benjamin Cowen said traders should be careful about dismissing Bitcoin’s historical cycle pattern in favor of a “supercycle” narrative, arguing that macro signals often get applied to crypto on the wrong timeframe. He said the macro backdrop matters, but he added that the same dataset can lead to different conclusions depending on how it gets interpreted.

U.S. Dollar Index Weekly Chart. Source: Benjamin Cowen

Cowen pointed to the ISM data as one example of that mismatch. He said ISM trends can support manufacturing stocks, yet they do not automatically translate into bullish signals for crypto. He also cited prior periods when Bitcoin moved against ISM, including bear market and pre halving years such as 2014 and 2019, to argue that a simple macro to crypto link often fails during specific parts of the cycle.

He then shifted the focus to the U.S. Dollar Index. On the weekly DXY chart, the index sat near 97.6 and traded close to a zone labeled “Jan Feb 2026,” a region the chart frames as a possible analogue to the 2018 bottom area. Cowen said that if DXY follows a 2018 style path and bottoms around this area, global M2 could start falling by summer 2026.

Cowen also described M2 as an unreliable tool for calling Bitcoin tops. He said Bitcoin typically tops before global M2 tops, but he added that Bitcoin was already close to a bottom in 2022 when global M2 topped. Based on that history, he argued M2 may work better as a late cycle signal that Bitcoin could be closer to a bottom than a top when M2 finally rolls over.

He closed by separating macro conditions for Bitcoin from macro conditions for altcoins. Cowen said the macro has stayed unfavorable for altcoins for years and he expects that pressure to persist for longer, even if Bitcoin continues to trade through its own cycle.