🔍 TL;DR

The collapse was not a random event nor a 'whale conspiracy', but a direct result of accumulated leverage, weak liquidity over the weekend, and the outflow of institutional capital. The market is experiencing a phase of capital preservation, not profit hunting.

In just one night, the crypto market witnessed one of the most violent liquidation days in its recent history.

Bitcoin touches 60,000 dollars, Ethereum crashes to 1,750 dollars, and more than 338,000 traders lost their positions completely.

This is not just a passing price correction — but a harsh lesson in risk management.

📉 Shocking numbers: Dissecting the disaster

Between February 5 – 6, 2026, the crypto market entered a sharp downward wave considered one of the strongest since the FTX collapse in November 2022.

The numbers alone are enough to illustrate the storm's magnitude:

2.6 billion dollars in liquidations within 24 hours

2.1 billion dollars in Long positions

468 million dollars in Short positions

Bitcoin: 1.34 billion dollars in liquidations

Ethereum: 560 million dollars

Solana: 189 million dollars

Bitcoin dropped about 17% in one day, touching the level of 60,000 dollars — a level not recorded since September 2024.

Thus, BTC has lost more than 50% of its value compared to the historical peak near 126,000 dollars in October 2025.

⚡ Chain of liquidations: How did the spark turn into a storm?

What happened was not a coincidence, but a cascading interaction (Cascade Effect) similar to the falling of dominoes:

Phase one: Breaking support – 70,000$

A pivotal psychological and technical level.

Upon breaking it, the first waves of liquidations began, especially for traders with high leverage.

Phase two: Acceleration – 65,000$

Every liquidation adds new selling pressure.

Breaking this level triggered a wider second wave of liquidations.

Phase three: Panic – 60,000$

At the peak of the storm, at 7:20 PM EST,

Liquidations worth 817 million dollars occurred within just 4 hours — the largest wave in the entire event.

🎯 In-depth analysis: Why did the collapse happen now?

1️⃣ Outflow of institutional capital

The data clearly indicates that what happened was not just Panic Retail:

Bitcoin ETF funds recorded a net outflow exceeding 800 million dollars over two days

In January 2025, these funds were net buyers of 46,000 BTC

In 2026, they turned into net sellers

This shift dramatically changed the supply and demand balance.

2️⃣ Low liquidity on weekends

The collapse occurred at a time when liquidity was historically low.

In such conditions, any small selling pressure turns into a multiplied price movement.

3️⃣ Correlation with traditional markets

Bitcoin was not an exception:

Tech stocks faced severe pressure

Microsoft fell about 10% after disappointing earnings results

Silver recorded — according to market data — one of its worst days historically

Gold also entered a phase of selling pressure

This reinforces the fact that Bitcoin is still traded as a Risk-On Asset, not a safe haven in times of stress.

4️⃣ Factor Kevin Warsh

Kevin Warsh's nomination for the Federal Reserve chair increased uncertainty.

Warsh is known for his hawkish stance, raising the odds of a more stringent monetary policy — a negative scenario for high-risk assets like crypto.

📊 Technical indicators scream: Fear Index at 5

The Fear and Greed Index dropped to just 5 points — the lowest level since June 2022.

What this means:

Extreme Fear

Traders focus on protecting capital, not making profits

Nearly complete absence of attempts to 'buy the dip'

What does history tell us?

March 2020: The beginning of a major upward wave

June 2022: Market bottom at 17k

November 2022 (FTX): A major turning point

⚠️ Important note:

The index may stay in these low areas for weeks or even months.

🐋 Whales underwater: even the big players are not immune

Quarterly loss: 12.4 billion dollars

Average purchase price: 76,037 dollars

Current price below average → All holdings 'underwater'

Total holdings: 713,502 BTC

One of the most famous whales in the market faced a full liquidation,

As a stark reminder that experience and capital do not eliminate the risk of leverage.

💡 Lessons learned: How to protect yourself?

1️⃣ Leverage is a double-edged sword

81% of liquidations came from Long positions.

Even 2x leverage can be deadly in a volatile market.

2️⃣ Stop Loss is not an option

Many lost their accounts because they assumed that the price 'always comes back'.

3️⃣ Weekend = Double risk

Lower liquidity → Higher volatility → Faster liquidations.

4️⃣ Diversifying assets

Bitcoin: -40% annually

Gold: +61% in the same period

Diversification clearly mitigated the shock.

5️⃣ Don't try to catch falling knives

Wait:

Break clear resistances

Improvement in trading volumes

Fear Index rising above 20

🔮 What's next? Possible scenarios

📈 Bullish scenario

Stability above 65,000$

Return of ETF flows

Improvement in market sentiment

🎯 Target: 75,000 – 80,000$

📉 Bearish scenario

Failed to hold above 60,000$

Continued institutional outflows

🎯 Targets: 57,000 → 55,000$

And in the worst case: 40,000 – 50,000$

Critical levels:

🔴 Support: 60,000 | 57,926 (200W MA) | 55,000

🟢 Resistance: 68,000 | 70,000 | 76,037

🎯 Summary: Balancing opportunity and risk

This collapse is not the end of Bitcoin, but a clear reminder that:

The market does not rise in a straight line

Leverage can wipe out capital within hours

Risk management is more important than predictions

Emotion is the number one enemy of the trader

For the long-term investor:

Gradual accumulation (DCA) may make sense — but without rush.

For the short-term trader:

Patience and waiting for confirmation is the smartest decision.

❓ Question:

Did you get liquidated during this storm? What is the most important lesson you learned?

Sharing experiences may save others from repeating the same mistakes.

⚠️ Disclaimer:

This content is for educational purposes only and not investment advice. Always do your own research (DYOR).

📚 Sources and references

Market liquidation report and the recent collapse:

Bitcoin, Ethereum Get Rekt In Historic $2.6B Liquidation Bloodbath — A brief analysis of the $2.6 billion liquidation volume in the market and its implications for BTC and ETH.

Stocktwits

Liquidity data and ETF fund flows:

ETF BTC Outflows and Market Impact — Shows the flows of Bitcoin ETF funds and their impact on market sentiment and price volatility.

COIN360

The broader market collapse and its correlation with traditional assets:

Crypto market volatility triggers $2.5 billion in bitcoin liquidations — Reuters report on market volatility and its increased sensitivity to macro factors.

Reuters

Performance of major crypto companies like Strategy:

Michael Saylor’s Strategy sees bitcoin trade below the purchase price of its holdings — Shows Strategy's losses and the impact of BTC's decline on its positions.

MarketWatch

Fear & Greed variables and market indicators:

Extreme Fear & Market Breakdown Reports — Extensive analytical data showing a decline in the Fear and Greed index and its impact on investor sentiment.

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