Bitcoin printed one of the largest ever daily candles to the downside on Thursday, sliding more than 15%, roughly $10,800. This dramatic move rippled through derivatives, spot venues, and the US Bitcoin ETF complex, making it a standout event in the crypto landscape. The scale of the drop wasn't just marked by the percentage decline but by a mix of stress signals that converged simultaneously, indicating a significant market reaction.

Implied volatility spiked, trading volumes exploded, and momentum gauges fell to levels typically associated with forced selling rather than discretionary risk reduction. Real Vision’s Jamie Coutts dubbed the session a "capitulation watch," referencing metrics rarely seen together. One notable statistic was Bitcoin’s implied volatility, which reached 88.55, nearing the peak observed during the FTX collapse.

Coinbase logged its eighth-largest trading day ever by USD value with $3.34 billion changing hands, reflecting the heightened market activity as roughly 54,000 BTC traded at approximately $62,000. Coutts pointed out the extreme momentum reset visible on daily charts, with a daily RSI of 15.64, akin to the lows seen during the March 2020 COVID crash.

"Margin calls are firing, and forced liquidations are likely still working through the system," Coutts noted, emphasizing that while this could signal a capitulation event, such processes can unfold over weeks or even months before a durable low establishes itself. Macro trader Alex Krüger refrained from pinpointing a price target but acknowledged the market's positioning and pricing distortions typical of turning points.

He highlighted that extreme negative funding and options skew were observed at levels not seen since the FTX collapse, alongside extraordinary volumes and liquidations. Krüger noted the presence of significant short positions opened between $64,000 and $60,000, suggesting a potential short squeeze could push prices to around $68,000, further fueling discussions about market bottoms.

"In the meantime, equities need to hold," he cautioned, adding that establishing a bottom doesn’t guarantee a major upward trend immediately afterward. Galaxy’s Alex Thorn described the market as historically stretched on RSI measures, indicating Bitcoin was the most oversold it had been since the collapse of Three Arrows Capital in June 2022. He categorized this as among the top three oversold events in Bitcoin's history, alongside November 2018 and June 2022.

The US spot Bitcoin ETF market didn't soften the blow; in fact, it amplified the day's trading frenzy. Bloomberg Intelligence's Eric Balchunas remarked that BlackRock’s iShares Bitcoin Trust (IBIT) shattered its daily volume record with $10 billion worth of shares traded, reflecting a 13% drop—its second-worst daily decline since inception. Anchorage Digital's David Lawant confirmed that IBIT's trading volume was the highest since its launch, surpassing previous records by 69% in shares and 27% in USD volume.

Positioning data revealed a complex, two-sided ETF ecosystem. K33 Research's Vetle Lunde observed that net equivalent short exposure in short BTC ETFs approached the November 2022 peak at 7,745 BTC. In contrast, 2x leveraged long BTC ETFs held 39,590 BTC, marking levels not witnessed since March 2024. Volatility remained a consistent theme amid these changes.

ProCap CIO Jeff Park noted that Bitcoin's implied volatility was now at 75%, the highest since the ETF launch in 2024, even surpassing gold volatility for the first time. While acknowledging the current pain in the market, he asserted that this turbulence was part of the necessary process for Bitcoin to reach new highs, suggesting that any future upward movement would occur rapidly.

At press time, Bitcoin rebounded from $60,000 to roughly $64,900, marking a gain of about 9% from the session's low. The volatility and chaos of the crash signal a critical moment for Bitcoin, with many traders and analysts closely monitoring the market for signs of stabilization and potential recovery.