The lagging leverage risks new drops of Bitcoin to $70,000-$80,000

According to market analysts, leverage in the cryptocurrency markets has not yet been fully liquidated, which could create new downward pressures on Bitcoin. Although the most dramatic liquidation event has already passed, experts warn that leveraged positions still exist, posing an ongoing risk to price stability.

When the 2-Sigma Correction Swept Out Speculators

Crypto analyst James Check described the recent market collapse as a “2-sigma long liquidation event,” a move that wiped out a significant number of leveraged speculators. Bitcoin experienced a sharp drop of over $24,000 in just 10 days, reaching seven-month lows of around $82,000 in November 2024.

A 2-sigma liquidation event represents a statistically significant price movement that triggers massive closures of leveraged positions. Although most leverage has already been removed from the market, Check warns that “the market has an incredible nose for detecting the last laggards,” suggesting that new waves of liquidations could be coming.

The analyst predicted that Bitcoin could dip into the $70,000–$80,000 zone to eliminate the remaining pockets of residual leverage. This would represent an additional decline from current levels (Bitcoin trading around $69,380 in March 2026), reinforcing a pattern of ongoing pressure in the market.

Technical Signs of Stabilization Versus Persistent Threat

Cryptocurrency markets showed tentative signs of stabilization after the upheaval several months ago. Augustine Fan, head of analysis at SignalPlus, noted that both sentiment and technical indicators (such as Bollinger Bands) suggest extreme oversold conditions, indicating that prices may have found temporary local lows.

However, this technical recovery should not be interpreted as a confirmation of a trend reversal. Fan identified the next significant support level around $78,000, warning that “a sustained break below would open the door to a further significant decline.” The analyst expects prices to fluctuate between $82,000 and $92,000 in the short term but remains vigilant about leveraged positions that could break with new drops.

Whales Continue Distribution, Hindering Recovery

On-chain data revealed by CryptoQuant paints a more complex picture. Analysts identified a potential local bottom but warn that the crucial group of Bitcoin whales (entities holding 1,000 to 10,000 BTC) continues actively selling.

Carmelo Alemán, CryptoQuant analyst, explained that “on-chain data shows a market shaped by institutional redistribution, structural weakness, and a rebound that could signal stabilization.” However, persistent selling by whales prevents a clear confirmation of a trend change, leaving the door open to new downward pressures related to residual leverage.

The behavior of these large entities remains decisive: “The recovery is promising, but the end of the bear phase requires an obvious change in whale behavior.” As long as they maintain their distribution stance, the risk of new leverage liquidations will continue to threaten market participants.