• Bitcoin briefly fell more than 50% from its October 2025 peak near $126,000, dipping to the low $60,000s before rebounding nearly 6% to around $65,700-$73,000 as of February 5, 2026.
  • The selloff erased ~$500 billion-$1 trillion from the crypto market cap, driven by leveraged unwinds, miner selling, and ETF outflows of hundreds of millions, with over $2 billion in crypto positions liquidated.
  • Analysts warn that a break below $60,000 could push prices into the mid-$50,000s, though bullish long-term targets of $138,000-$200,000 persist for 2026.

Bitcoin’s dramatic plunge from its late 2025 highs has sent shockwaves through the crypto market, briefly wiping out half its value in a selloff that accelerated in early February 2026. According to people familiar with the matter, the crash was fueled by a cascade of liquidations and leveraged position unwinds, rather than a clear fundamental trigger, with Bitcoin touching near $60,000 before climbing back to around $65,700. Ether and Solana saw similar sharp drops before partial recoveries, reflecting broader market turmoil.

Volatility has surged amid this downturn, with ETF outflows hitting $434 million and over $2 billion in crypto positions liquidated in a 24-hour span, per data from CoinGlass. The selloff erased approximately $500 billion to $1 trillion from the overall crypto market capitalization, now hovering around $2.3 trillion, down from a peak of $3.3 trillion in mid-January. Traders are now closely watching whether Bitcoin can hold the $60,000 level—a critical support that, if broken, could push prices into the mid-$50,000s or even $40,000, as some analysts predict.

Behind the scenes, the rout has been amplified by tight global liquidity, higher interest rates, and mechanical selling triggered by ETF outflows below Bitcoin’s $84,000 cost basis, linking crypto weakness to stock market declines. One trader noted, “It’s a classic leverage flush—without a deal to stabilize sentiment, the market risks further downside.” Efforts to restructure positions have hit a snag, with negative funding rates and a 22% drop in derivatives open interest from $815 billion exacerbating the pressure. Miner selling, particularly from firms like Riot (RIOT) and Marathon (MARA), has further weakened sentiment, eroding confidence among over-leveraged traders who faced $1.26 billion in long liquidations versus $187 million in shorts.

In a brief statement, an anonymous analyst highlighted, “This is a temporary flush that could spark a healthier uptrend if supports hold.” The crash marks Bitcoin’s worst since November 2024, erasing gains from the Trump election rally and testing its “digital gold” narrative amid mainstream adoption. Despite the turmoil, bullish consensus remains for 2026, with targets from firms like Finder, Bernstein (BN), and Standard Chartered pointing to $138,000-$200,000 driven by ETF inflows and institutional adoption. For now, the focus is on real-time developments: holding $62,800-$60,000 is critical, with Polymarket odds showing a 69% chance Bitcoin stays below $70,000 in February. Attempts to reach key miners for comment were unsuccessful, but market watchers expect volatility to persist as the dust settles.