Bitcoin Slides Below $70,000 as U.S. Volatility Index Signals a Risk‑Off Shift
By Crypto Markets Desk – February 17 2026
Bitcoin (BTC) erased the $70 k barrier on Tuesday, nudging the world’s largest cryptocurrency back toward year‑to‑date lows. The move came amid a sharp uptick in the CBOE Volatility Index (VIX) and a pronounced pullback in U.S. Treasury yields, both of which are traditionally viewed as barometers of investor risk appetite.
Market snapshot
- BTC price: Below $70 k, edging toward the $65 k‑$68 k support zone that could trigger a deeper correction if it fails to hold.
- VIX: 22.5, the highest level recorded since late 2025 and approaching its peak for the current year.
- U.S. 10‑year yield: 4.02 %, down 3.75 % over the previous week – the steepest weekly slide since September 2025 and near its 200‑day simple moving average, a level not seen since March 2022.
- Crypto Fear & Greed Index: 7 (Extreme Fear), one of the lowest readings in the index’s history.
Why the VIX matters for Bitcoin
The VIX gauges market expectations of 30‑day equity volatility. When it climbs above the 20‑point threshold, investors typically retreat from risk‑on assets and seek safety in cash or Treasury bonds. Historical data show a recurring inverse relationship between the VIX and Bitcoin: each time the VIX breached 20, BTC experienced either a price peak followed by a pull‑back or a direct correction.
- Late 2024 – VIX > 20 preceded Bitcoin’s $104 k high, after which the digital asset fell sharply.
- Early 2025 – A VIX surge past 25 coincided with BTC’s slide to the $80 k region.
- Q4 2025 – The index’s rise above 20 aligned with Bitcoin’s cycle high near $126 k, and a subsequent dip under $100 k when the VIX spiked again.
With the VIX now perched at 22.5, the pattern suggests a heightened probability that Bitcoin will remain under pressure until volatility recedes.
Treasury yields and the broader “defensive” stance
The 10‑year Treasury yield’s 3.75 % weekly decline marks the most aggressive drop in months. The yield is flirting with its 200‑day moving average, a technical level that has historically acted as a ceiling for further declines. Lower yields typically reflect a flight to safety, reinforcing the risk‑off narrative that is already playing out across equities and cryptocurrencies.
On‑chain metrics and sentiment
- Profit‑taking: On‑chain data indicate that the proportion of Bitcoin supply in profit briefly touched 50 % during the recent sell‑off, a figure that has historically preceded deeper bear market corrections.
- Fear & Greed Index: The index’s reading of 7 places market sentiment in the “Extreme Fear” zone, a condition that, while sometimes a contrarian buying signal, also underscores the current defensive posture among traders.
- Bitwise commentary: The asset‑management firm notes that extreme fear has historically coincided with market bottoms, but warns that the current profit‑supply dynamics suggest a more cautious outlook than previous cycles.
Stablecoin liquidity: a slowing tide
CryptoQuant’s flow data show that stablecoin reserves on exchanges have been volatile over the past year. After a $11.4 bn inflow leading up to November 2025, reserves contracted by $8.4 bn in December 2025 as capital fled the market. Over the last 30 days, total stablecoin balances on major exchanges slipped by roughly $2 bn—a modest outflow compared with the sharp exits seen in Q4 2025.
- Dominance of Binance: The exchange holds about $47.5 bn in USDT and USDC, roughly 65 % of all centralized‑exchange stablecoin balances, with USDT alone up 36 % year‑over‑year.
- USDC inflows: Analyst Maartunn points out that USDC deposits are dwindling again, indicating that fresh liquidity has not yet returned at meaningful scale.
The deceleration in stablecoin inflows suggests that market participants remain wary, limiting the upside potential for Bitcoin until a new bullish catalyst emerges.
Outlook and key takeaways
- Rising VIX reinforces a risk‑off environment – At 22.5, the volatility index is near its highest level this year, historically a bearish signal for Bitcoin.
- Treasury yields are retreating – The 10‑year yield’s slide to 4.02 % and its approach to the 200‑day SMA signal defensive positioning across traditional markets, likely spilling over to crypto.
- Sentiment is at an extreme low – The Fear & Greed Index’s reading of 7 reflects pervasive market anxiety, though history shows that such extremes can sometimes presage a bottom.
- On‑chain profit supply is fragile – Bitcoin’s supply in profit barely breached the 50 % mark, a level associated with deeper corrective phases in past cycles.
- Stablecoin liquidity growth has stalled – Modest outflows and dwindling USDC deposits point to constrained capital inflows, limiting the pool of funds that could support a price rally.
While Bitcoin’s price dip below $70 k may tempt contrarian buyers, the confluence of heightened equity volatility, falling Treasury yields, and muted liquidity suggests that the cryptocurrency could remain under pressure in the short term. Market participants will be watching for any shift in macro risk sentiment or a clear on‑chain accumulation signal before the next leg of the rally can be confidently anticipated.
The information presented here is for editorial 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/macro-headwinds-test-bitcoin-price-as-dollar70k-crumbles-amid-us-market-volatility?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
