Bitcoin “Fake‑outs and Shake‑outs” Trigger $120 M in Liquidations on U.S. Bank Holiday
Monday, Feb 16 2026 – With Wall Street closed for a federal holiday, thinner order books on major crypto exchanges allowed large‑volume participants to manipulate short‑term price action. Bitcoin (BTC) surged to $70 000 before snapping back, wiping out both long and short positions across the market.
Market backdrop
During the U.S. bank holiday, trading volume on Bitcoin fell sharply, creating a low‑liquidity environment that amplified price swings. Data from TradingView showed the BTC/USD pair inching within a tight band before a brief breakout to $70 000, after which a rapid pull‑back erased the gain. The narrow range and sudden spikes are characteristic of “fake‑outs” – temporary price moves that lure traders into opening positions that are quickly reversed.
Liquidity squeezes and trader liquidations
CoinGlass, which tracks on‑chain and exchange‑level liquidation events, reported more than $120 million in crypto liquidations in the four‑hour window ending at the time of writing. The heat‑map of liquidations illustrated clusters of forced closures both on the long side (buyers) and the short side (sellers) as price oscillated.
- Bid/ask walls: As BTC price fell, large sell walls were erected just above the prevailing level, intensifying downward pressure.
- Whale activity: Order‑book data from Binance’s BTC/USDT market, compiled by Material Indicators, showed substantial whale volume moving in tandem with the price swings, reinforcing the “shake‑out” narrative.
Trader “Daan Crypto Trades” noted that volatility was markedly higher than usual, echoing a broader trend across financial markets where reduced participation often leads to amplified price moves.
Technical snapshot – RSI in oversold territory
Weekly RSI readings from Material Indicators placed Bitcoin at 27.8, the lowest level recorded since June 2022. Readings below 30 are traditionally interpreted as “oversold,” suggesting a possible bottoming phase. Keith Alan, co‑founder of Material Indicators, highlighted the parallel with the 2022 bear market, when a similar RSI dip preceded a five‑month consolidation before a macro‑level bottom was established.
“The current weekly RSI mirrors the once‑per‑cycle lows we saw in 2022, but the outcome may differ,” Alan said in a recent X post.
Comparative perspective: 2022 bear market echoes
Historical analysis points to several precedents:
- 2015 & 2018: RSI lows coincided with genuine market bottoms.
- 2022: The RSI dip preceded a prolonged consolidation period rather than an immediate reversal.
While the present RSI suggests oversold conditions, analysts caution against assuming a direct replication of past patterns. Differences in macro‑economic backdrop, regulatory environment, and institutional participation could steer the trajectory elsewhere.
Key takeaways
| Insight | Implication |
|---|---|
| Liquidity crunch | Low market depth on a holiday created an environment where large entities could steer price, leading to “fake‑outs” that caught retail traders off‑guard. |
| $120 M liquidations | The sheer volume of forced closures underscores the risk of trading in thin markets, especially when leverage is employed. |
| Weekly RSI at 27.8 | Oversold reading signals potential bottoming, but historical parallels warn that a consolidation phase may follow before any decisive move. |
| Whale participation | Significant order‑book activity on Binance (and limited buying pressure on OKX) suggests that institutional or high‑net‑worth actors are dictating short‑term direction. |
| Market caution | Traders should reassess risk exposure, especially concerning leveraged positions, and monitor liquidity metrics before entering new positions. |
Outlook
As U.S. markets reopen, liquidity is expected to improve, potentially dampening the extreme volatility observed on Monday. Nonetheless, the episode serves as a reminder that crypto markets can react sharply to changes in order‑book depth, especially during periods of reduced traditional market participation. Investors and traders are advised to keep an eye on both on‑chain whale flows and technical indicators such as RSI to gauge whether the current oversold state translates into a sustainable price recovery or a longer‑term consolidation.
The information presented here is for informational purposes only and does not constitute investment advice. Readers should conduct their own due diligence before making any trading decisions.
Source: https://cointelegraph.com/news/bitcoin-weekly-rsi-echoes-mid-2022-bear-market-as-btc-plays-liquidity-games?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
