Bitcoin Dips to $65,882 as USDT Tumbles $3B

• Analysts identify potential market sentiment bottom, drawing parallels to 2022 trends.
• Liquidity contraction in Tether (USDT) signals stress but also possible market exhaustion.

Bitcoin's price dropped to $65,882 on February 23, 2026, alongside a notable $3 billion decline in Tether's (USDT) market supply. Analysts highlighted parallels to previous market cycles, indicating that extreme market fear and sentiment dips might signal the approach of a price bottom and potential recovery.

The recent market activity bears similarities to conditions prior to past recoveries, notably the 2022 cycle bottom, according to a report by Cryptopolitan on February 23, 2026. The contraction in USDT liquidity and highly subdued market sentiment align with historical transitional phases often preceding temporary market recoveries.

Matrixport analysts emphasized that Bitcoin sentiment has reached "extremely depressed" levels, as measured by their proprietary Fear and Greed Index. These levels, similar to those seen in prior cycle bottoms, suggest selling exhaustion may be stabilizing market trends. Rebounding sentiment could indicate the waning of fear-driven market pressures.

Data from MEXC revealed that smaller participants are accumulating Bitcoin despite increased price volatility. This steady accumulation reflects confidence among these investors, as no significant increase in Bitcoin balances on exchanges was noted. MEXC attributed the recent selling behavior primarily to derivatives repositioning, rather than to widespread liquidations by core investors.

Historically, heightened fear levels in the market have often preceded recoveries, as seen during the 2020 COVID-19 crash and the FTX collapse in 2022. Cryptopolitan cited these instances as examples where extreme fear acted as a contrarian indicator, supporting optimistic sentiments toward the current market phase. Analysts interpret this as a moment of potential market exhaustion rather than a prelude to prolonged bearish conditions.

However, risks remain in the short term. IG Group maintained a neutral short-term outlook for Bitcoin with a bearish bias, attributing ongoing uncertainty to external macroeconomic forces and ETF-related activity. While long-term price targets of $122,000 to $150,000 remain intact, near-term movements are seen as unpredictable.

As of February 23, 2026, 15:08 UTC, Bitcoin (BTC) is trading at $65,882.637, with a 2.121% change in 24-hour trading volume, according to CoinMarketCap. Meanwhile, Tether (USDT) remains at $1 with a minimal 0.007% change in the last 24 hours. These figures underscore the shifting momentum and liquidity stresses influencing current market conditions.