Cryptocurrency markets begin a final capitulation amid fears of drying liquidity and forced liquidations
Cryptocurrency markets begin a final capitulation amid fears of drying liquidity and forced liquidations
The cryptocurrency market has entered a phase of structural breakdown after wiping out roughly $2.2 trillion in market capitalization from its October peak, with liquidity drying up and forced liquidations compounding to push uncertainty to extreme levels.
According to cryptocurrency-focused outlet BeInCrypto on February 6 (local time), Bitcoin (BTC) surrendered all gains made since the election of U.S. President Donald Trump, plunging more than 10% while precariously defending the $60,000 level. Market analysts point to depleted liquidity as the root cause of the crash, warning that current Bitcoin market depth has shrunk to about 30% of its October peak, creating risk conditions similar to those seen during the collapse of crypto exchange FTX in 2022.
Over the past 24 hours, approximately $2.65 billion in forced liquidations occurred across the global cryptocurrency market, completely undermining investor sentiment. Data analytics platform CoinGlass reported that 586,053 investors lost their positions in this event, with long-position liquidations alone exceeding $2.2 billion. As massive liquidation supply hit an already illiquid market, abnormal price swings of up to $10,000 in a single day emerged, creating a vicious cycle that fueled further declines.
As Bitcoin slides toward the $60,000 level, even the average acquisition prices of major corporate holders such as Strategy are being threatened, amplifying uncertainty on corporate balance sheets. Public companies holding digital assets are exposed to bankruptcy risks stemming from asset devaluation, while institutional investors are also exiting the market amid heightened risk aversion. Veteran technical analyst Peter Brandt offered a bleak outlook, stating that based on Bitcoin’s power law model, the price has entered a crash zone that could extend declines to around $42,000.
However, on-chain data analytics firm Glassnode noted that “Bitcoin’s capitulation index has surged to the second-highest level in the past two years,” suggesting that forced selling may be nearing its peak. Such large-scale liquidation events can serve as a cleansing process that flushes out excessive leverage and potentially create genuine buying opportunities. Economist Daniel Lacalle analyzed that the current deleveraging process is driving out speculative demand and could represent a strong entry point for long-term investors.
The cryptocurrency market is undergoing a painful phase of structural adjustment in which speculative froth is being removed and spot-based accumulation is beginning. While the prospects for a short-term recovery remain unclear, the resolution of structural vulnerabilities makes price stabilization at key support levels a critical factor for any future rebound. Investors are closely monitoring market developments while prioritizing capital preservation and maintaining conservative portfolio strategies amid heightened volatility.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for any investment losses based on its content. The information should be interpreted solely for informational purposes.*
<저작권자 ⓒ 코인리더스 무단전재 및 재배포 금지>
|
  많이 본 기사
English 많이 본 기사
|
