On February 1, 2026, Bitcoin briefly fell below $76,000, triggering a massive market-wide liquidation event and raising questions about its fundamental value.
- Market Crash: Bitcoin’s drop led to nearly $2.2 billion in liquidated futures contracts within 24 hours, the highest single-day volume since “October 11th.” Major cryptocurrencies like Ethereum and SOL saw significant liquidations, and several high-profile “whale” investors were wiped out.
- Broader Financial Turmoil: The crypto crash mirrored extreme volatility in traditional markets, with spot gold and silver seeing rare double-digit percentage declines on the same day, indicating widespread investor panic.
- Key Contributing Factors:
- Geopolitical Risks: An explosion in Iran and escalating tensions in the Middle East, combined with the threat of another U.S. government shutdown, heightened market uncertainty.
- Regulatory Pressure: New SEC guidance equating tokenized stocks with traditional securities crushed hopes for a “light-touch” regulatory approach for crypto assets.
- Loss of Narrative: Bitcoin has recently failed to track either risk assets (like tech stocks) or safe-haven assets (like gold), confusing investors about its core value proposition. This is reflected in consecutive weeks of net outflows from Bitcoin spot ETFs.
- Industry Outlook: The article suggests that while 2026 poses an extreme test for crypto, a major market reshuffle may ultimately be beneficial for the industry’s long-term health.
Written by Eric, Foresight Information
Within the early hours of February 1, 2026, Beijing time, Bitcoin briefly fell under $76,000, breaking under Technique’s value line once more after almost two and a half years. It was additionally the primary time it had fallen under the $80,000 mark since April 12, 2025, and was solely a step away from the low of round $74,500 reached on April 7, 2025.
In line with CoinAnk knowledge, almost $2.2 billion in cryptocurrency futures contracts had been liquidated throughout the community inside 24 hours, wiping out over 335,000 buyers and marking the very best single-day liquidation quantity since “October eleventh”. Ethereum liquidations totaled roughly $961 million, Bitcoin liquidations $679 million, and SOL liquidations $168 million.
A number of high-profile whales had been additionally not spared. Huang Licheng’s “Machi Brother” place was fully liquidated on the night of January 31; the tackle beginning with 0x9ee, often known as the “CZ counterparty,” had over $60 million liquidated, shedding all income and incurring a loss of over $10 million; the so-called “insider” who shorted after the 1011 flash crash additionally had over $200 million liquidated, going from a revenue of $142 million to liquidation in simply 56 days.
In the meantime, as Ethereum as soon as fell to $2240, Pattern Analysis, owned by Yi Lihua, noticed its holdings of 651,300 ETH undergo a floating loss of almost $1.2 billion. Pattern Analysis at present has 175,800 WETH staked on Aave, borrowing roughly 274 million USDT, with a borrowing place well being of 1.29 and a liquidation worth of $1558. Though the liquidation worth continues to be a long way from the present worth, if the market downturn continues, $1500 shouldn’t be out of attain.
Current monetary market volatility has been extraordinarily excessive. Based mostly on closing costs, spot gold and silver fell by greater than 10% and 26% respectively on the final buying and selling day of this week, representing huge declines hardly ever seen in a long time. Microsoft’s Azure development alone noticed a 1% quarter-on-quarter decline, ensuing in a market capitalization loss of over $350 billion. These staggering figures show that funds are extremely concentrated in a few belongings, and everyone seems to be on edge; even the slightest crack might set off a stampede of promoting.
Geopolitical dangers escalate, and the US authorities shuts down once more.
In line with Xinhua Information Company, an explosion occurred in a residential constructing in Bandar Abbas, Iran, on the night of January thirty first, Beijing time. The instability on the Strait of Hormuz, a key oil hub dealing with roughly 20% of the world’s seaborne oil, coupled with escalating US-Iran battle, has additional heightened market issues in regards to the scenario in the Center East. Whereas threat aversion associated to the worldwide scenario could also be a contributing issue, the founder of Punchbowl Information tweeted round 4 AM in the present day that Home Democrats have knowledgeable Home Republican management that they won’t help Republicans in passing a funding invoice whereas funding is at present suspended. This might flip what was initially considered a authorities shutdown lasting solely a few days into a second, longer shutdown in months.
Though the information got here later than the beginning of the decline, the panic brought on by varied uncertainties, coupled with the skinny liquidity over the weekend, meant that even a small-scale sell-off was sufficient to set off steady liquidations. Abraxas Capital’s Heka fund transferred 2,038 bitcoins to Kraken final night time.
Regulatory laws severely damages confidence, and Bitcoin’s standing is being questioned.
Since 10/11, the cryptocurrency market has step by step underperformed the inventory, valuable metals, and commodity markets. Apart from a vital drop in liquidity, the much-anticipated however in the end ineffective crypto market construction laws, which treats crypto belongings with the identical stage of safety as securities, may be a contributing issue. The previous cryptocurrency growth largely benefited from a relaxed regulatory setting, and the event of stablecoins and RWA tokenization started to combine into the mainstream, whereas the survival of “crypto native” cryptocurrencies unexpectedly suffered. This hole between expectations and actuality has triggered the earlier over-optimism to backfire.
On January 29, Beijing time, the U.S. Securities and Change Fee (SEC) issued new regulatory steerage, clarifying the underside line that tokenized shares needs to be topic to the identical regulatory guidelines as extraordinary shares, which might be thought to be a demise sentence to the expectation of “weak regulation” for tokenization.
As well as, Bitcoin’s latest divergence from each dangerous and safe-haven belongings has solid doubt on its elementary nature. For a appreciable interval, Bitcoin sometimes adopted the tendencies of tech shares or gold, however since October, it has didn’t maintain tempo with each the AI-driven surge in US shares and silver, and the geopolitical rally in gold. Clearly, whether or not one is bullish on AI growth or in search of a secure haven, there are higher alternate options to Bitcoin in the market.
The online outflow of almost $3 billion from spot ETFs over two consecutive weeks additionally not directly confirms this. Whereas US shares and gold and silver each skilled vital declines final weekend, funds didn’t circulate into the cryptocurrency market, indicating that market curiosity in cryptocurrencies has waned.
2026 will probably be an excessive take a look at of the resilience of the crypto market. Whereas we don’t need the trade to be hit once more, most individuals would agree that a main reshuffle shouldn’t be essentially a dangerous factor for the present crypto trade .
