Bitcoin and Ethereum Lose Key Support: The 860M Structural Purge

Massive selling pressure on BTC signals a fundamental shift in market participant psychology.

The Great Deleveraging of 2025: Bitcoin and Ethereum Face a Structural Purge

A chilling wave of selling is ripping through the crypto market today, pushing Bitcoin (BTC) and Ethereum (ETH) below critical support levels. This isn't just a dip; it's a full-blown deleveraging event, a brutal reminder that leverage cuts both ways.

BTC Price Trend Last 7 Days

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What started as a modest pullback has metastasized into a structural purge. Weakening momentum, diminishing institutional demand, and pervasive cautious sentiment are conspiring to pressure prices across virtually every major digital asset.

The 860M liquidation event exposes the fragility of over-leveraged crypto markets.

Bitcoin, after a brief flirtation with the $70,000–$71,000 range, has slipped back to levels last seen in late 2024. Ethereum mirrors this grim trajectory, sliding towards the $2,000 mark and testing even lower intraday levels. These breaches of technical support zones are not accidental; they are designed to trigger precisely what we're seeing: forced liquidations.

🚩 The Crypto Markets Reckoning 860 Million Wiped Out

The numbers speak for themselves. Data from across the ecosystem reveals that over $860 million worth of crypto positions have been liquidated in the past 24 hours alone. Bitcoin takes the lion's share of this wipeout, a clear signal of where the heaviest leverage was concentrated.

Here’s the catch: the vast majority of these liquidations were long positions. This highlights an uncomfortable truth: too many traders were positioned for endless upside, ignoring the accumulating downside risks. This isn't just a market correction; it's a clearing out of speculative froth.

Bitcoin's Slippery Slope: Key Indicators Flash Red

🐻 Bitcoin's decisive move below its 365-day moving average is a significant bearish signal. Seasoned analysts know this isn't a minor blip. On-chain metrics are already drawing stark comparisons, noting that BTC's current pace of decline, especially after this November 2025 breach, is faster than during comparable phases of the 2022 bear market.

Adding fuel to the fire, U.S. spot Bitcoin ETF flows are no longer the market's saviour. We're seeing a distinct shift from net inflows towards net outflows as we approach the year-end, removing a critical pillar of demand that propped up prices through much of 2025.

Rapid deleveraging in ETH positions forces a painful recalibration of short-term valuations.

Market participants are now fixated on the $70,000 level. Some optimists cling to it as potential support, but a sustained break below this psychological barrier would, in my view, open the floodgates for a deeper plunge toward the $60,000 region. Sentiment is fragile, and it won't take much to destabilize it further.

Ethereum's Plunge: Whales Deleveraging First

🌊 Ethereum hasn’t escaped the carnage. ETH-related liquidations have topped $200 million in recent sessions as its price dives towards the psychological $2,000 mark. This isn't just retail getting squeezed; smart money is moving.

Large holders are actively reducing their exposure. On-chain intelligence points to significant activity, notably from entities like Trend Research, who reportedly offloaded roughly 188,500 ETH over several days. This was a calculated move to repay hundreds of millions in stablecoins, aggressively cutting leverage and lowering their liquidation thresholds.

🌊 This proactive deleveraging from whales shifts attention to critical risk zones for ETH, particularly between $1,576 and $1,682. If prices continue to slide, we could see a clustering of forced liquidations in this range, creating further cascading effects.

📍 Market Sentiment Fear Takes Hold

➖ Beyond the behemoths, the broader altcoin market is bleeding. BNB, Solana, and Dogecoin are posting daily losses in the 6% to 11% range. The total crypto market capitalization has retreated to around $2.4–$2.5 trillion, a significant reduction from its peak.

Open interest in derivatives markets continues to decline, a clear signal of reduced risk appetite among traders. The smart money isn’t just deleveraging; it’s exiting the casino.

Fading institutional interest in BTC creates a vacuum that retail liquidations cannot fill.

Sentiment indicators confirm the shift. The Fear and Greed Index has plunged deeper into “extreme fear,” a familiar zone for those who’ve weathered previous cycles. Lingering concerns around stablecoin stability, particularly brief deviations in USDT’s peg, are adding another insidious layer of uncertainty to an already nervous market. Traders aren’t just watching support levels; they're praying they hold.

📍 span stylefontweight boldKey Takeawaysspan

• Aggressive Deleveraging: Over $860 million in liquidations signals a significant reduction of leveraged long positions across the market, cleansing excessive speculation.
• Key Support Breaches: Bitcoin's fall below its 365-day moving average and ETH's dip towards $2,000 are critical technical breakdowns, suggesting further downside risk.
• Institutional Retreat: Weakening institutional demand and shifting ETF flows are removing a crucial support pillar for market prices.
• Whale Deleveraging: Large entities are actively reducing risk, preemptively cutting leverage, which often presages deeper market corrections.
• Extreme Fear: Investor sentiment has plummeted, indicating widespread caution and a potential capitulation phase, but also setting the stage for future opportunities.

🔄 Stakeholder Analysis & Historical Parallel

🐋 This latest market deleveraging is no accident; it’s a calculated, albeit painful, recalibration. When excessive leverage builds, the market finds a way to purge it. In my view, this appears to be a systemic flushing, rather than a single coordinated attack, but the outcome is the same: capital concentrates in stronger hands.

💥 The most striking historical parallel to this current market dynamic is undoubtedly March 2020's "Black Thursday." Back in 2020, as the world grappled with unprecedented uncertainty, crypto markets experienced a rapid, deep crash. Bitcoin plummeted over 50% in a single day, driven by a massive, cascading liquidation event that saw derivatives exchanges overwhelmed. The outcome was a swift and brutal deleveraging of leveraged positions, particularly those tied to DeFi protocols, which were still nascent at the time.

The lessons learned from Black Thursday 2020 were stark: markets can collapse with terrifying speed when leverage is overstretched, especially under macro stress. It revealed the interconnectedness of derivatives and spot markets, and how a funding squeeze in one can trigger a domino effect across the other. What's different today is the sheer scale and institutionalization of the market; what's identical is the fundamental mechanism: over-leveraged long positions always get rekt when the tide turns.

💧 This time, the external catalyst isn't a sudden, global health crisis, but rather a slow bleed of institutional conviction and a growing recognition of inherent market fragility. Yet, the playbook remains eerily similar: shake out the weak hands, reclaim liquidity, and position for the next cycle.

Stakeholder	Position/Key Detail
👥 Retail Investors (Longs)	Heavily liquidated, forced out of leveraged positions anticipating continued upside.
🏢 Institutional Investors	💰 Fading demand, U.S. spot Bitcoin ETFs shifting to net outflows, reducing market support.
📊 Trend Research (Whales)	Proactively sold 188,500 ETH, repaid stablecoins to cut leverage and reduce liquidation risk.
🏢 Derivatives Exchanges	Facilitating large-scale liquidations, accelerating downside price movements across BTC and ETH.
On-chain Analysts	📉 Monitoring key moving averages, identifying risk zones, comparing current decline pace to 2022 bear market.

🔮 Thoughts & Predictions

The current deleveraging, much like Black Thursday in 2020, underscores a brutal but necessary market reset. While painful in the short-term, these structural purges lay the groundwork for more sustainable growth by flushing out unsustainable leverage. We should anticipate continued volatility as the market searches for a true bottom, potentially testing Bitcoin's $60,000 level and Ethereum's $1,500-$1,600 range in the immediate term.

Breaking the long-term trend line suggests a prolonged winter for major crypto assets.

What distinguishes this cycle from 2020 is the sheer institutional presence. Fading ETF inflows signal a pause, not an exit, from traditional finance. However, this also means larger capital flows are more sensitive to macro shifts. The medium-term outlook points to a consolidation phase, with smart money accumulating during this dip, positioning for a rebound once the market finds its footing. Don't expect a V-shaped recovery; this will be a grind.

The bottom line is that while liquidations are scary, they are cleansing. This "structural purge" paves the way for a healthier market. Savvy investors will use this period of capitulation to reassess portfolios, identify undervalued assets, and strategically deploy capital, remembering that true wealth is built when others are fearful. The next leg up won't be for everyone, only those who navigate the current storm.

🎯 Investor Action Tips

• Monitor Liquidation Heatmaps: Actively track on-chain liquidation maps for BTC and ETH to identify potential cascade points (e.g., $60,000 for BTC, $1,500 for ETH) and inform entry/exit strategies.
• Assess Leverage Exposure: Review your own portfolio's leverage. Consider reducing or hedging exposure if you are overextended, particularly in volatile market conditions.
• Identify Strong Projects: Use this dip as an opportunity to research and accumulate fundamentally strong projects that are suffering from broader market sentiment, but have solid long-term potential.
• Prioritize Stablecoin Health: Given recent peg deviations, monitor stablecoin health and consider diversifying your stablecoin holdings if you hold significant amounts, reducing single-point-of-failure risk.

📘 Glossary for Serious Investors

⚖️ Deleveraging Event: A market phenomenon where investors are forced to close leveraged positions due to margin calls or rapidly declining asset prices, leading to cascading sales and further price drops.

⚖️ Long Position Liquidation: The forced closing of a derivative contract (often a futures or perpetual swap) where a trader bet on price appreciation, because the asset's price has fallen below the margin maintenance level.

⚖️ 365-day Moving Average: A widely used technical indicator representing the average price of an asset over the past 365 days, often used to identify long-term trends and significant support/resistance levels.

🧭 Context of the Day

Today’s structural purge of leverage is a painful yet critical reset, forcing capitulation but ultimately strengthening the market for discerning investors.

📈 BITCOIN Market Trend Last 7 Days

Date	Price (USD)	7D Change
1/31/2026	$84,141.78	+0.00%
2/1/2026	$78,725.86	-6.44%
2/2/2026	$76,937.06	-8.56%
2/3/2026	$78,767.66	-6.39%
2/4/2026	$75,638.96	-10.11%
2/5/2026	$73,172.29	-13.04%
2/6/2026	$65,166.54	-22.55%

Data provided by CoinGecko Integration.

💬 Investment Wisdom

"The market is a device for transferring money from the impatient to the patient."
— Warren Buffett

Crypto Market Pulse

February 6, 2026, 06:40 UTC

Total Market Cap

$2.31 T ▼ -6.92% (24h)

Bitcoin Dominance (BTC)

56.29%

Ethereum Dominance (ETH)

10.05%

Total 24h Volume

$350.16 B

Data from CoinGecko

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