TLDR
- Bitcoin dropped 17%, erasing gains from post-Trump election highs.
- ETF outflows totaled $817 million, impacting market liquidity significantly.
- Over 588,000 traders faced liquidations, primarily in long positions.
Bitcoin has experienced a sharp 17% price drop, erasing prior gains linked to post-Trump election highs. The cryptocurrencyโs value fell to a range of $60,000 to $74,680, triggering $2.7 billion in liquidations. Most of these liquidations, approximately 85%, came from leveraged long positions.
The Crypto Fear & Greed Index, a measure of market sentiment, reached a record low of nine, indicating extreme fear among investors. Market data shows Bitcoin is down 38% from its 2026 peak of $97,000.
ETF Outflows and Broader Market Impact
ETF outflows contributed to the downturn, with $817 million withdrawn in a single day. This contributed to a broader loss of $500 billion in the crypto market cap. Notably, there are no direct statements from key industry figures on this event.
No official statements or comments regarding the event were found on major platforms such as Twitter, exchange portals, or official project websites, despite the significant market impact.
Widespread Liquidations Among Bitcoin Traders
More than 588,000 traders faced forced liquidations, with the vast majority in leveraged long positions on Bitcoin. While some companies like Metaplanet continued to accumulate Bitcoin, specific details about other players in the market remain limited.
The U.S. spot Bitcoin ETFs are experiencing net negative flows for 2026, escalating the current liquidity vacuum. According to CryptoQuant data, ETFs have become net sellers following the acquisition of 46,000 Bitcoin in the previous year.
Broader Effects on Other Cryptocurrencies
Bitcoinโs drop affected other digital assets, including Ethereum, which saw a decrease of over 10%, settling at $1,880. Meme coins and other tech-correlated assets also mirrored broader market declines. The total liquidations reached between $2.7 and $2.71 billion, predominantly impacting Bitcoin.
Volatility surged with BVIV reaching the highest levels since the FTX collapse, and futures funding rates turned negative. Prediction markets now show a high probability that Bitcoin could remain below $65,000, or even $60,000, by year-end.
Historical Comparisons to Past Market Events
This recent plunge represents the worst one-day performance since the FTX collapse in November 2022. Bitcoinโs realized losses now exceed those during the Luna collapse and FTX bankruptcy, with the Fear & Greed Index falling to similar lows experienced in June 2022.
Prior events, such as the weekend of February 1-2, saw a similar pattern with $2.5 billion liquidated from 160,000 accounts, highlighting the impact of thin liquidity on market dynamics.
Current Market Sentiment and Future Outlook
The broader market sentiment remains overwhelmingly fearful, as evident through the Fear & Greed Index. Analysts suggest that Bitcoin needs to stabilize around $60,000 to manage risk-off flows effectively.
Past timeline events, like the Fed Chair nomination on January 30 and the capitulation on February 5, played roles in the ongoing market sentiment, with prices continually adjusting in response to these catalysts.
| Disclaimer: The content on defiliban.com is provided for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry inherent risks. Please consult a qualified financial advisor before making any investment decisions. |
