Crypto Liquidations Hit $2.65 Billion in the Past 24 Hours, but Bears May Be Near Capitulation

Trader losses intensified during the first week of February. Liquidation volume kept rising as the market repeatedly crushed recovery expectations, driven by consecutive red candles. However, several analyses point to light at the end of the tunnel, even though a rapid recovery remains unlikely. Over $2.6 Billion Liquidated in 24 Hours Reflects Structural Market Weakness. CoinGlass reported that total crypto market liquidations reached $2.65 billion over the past 24 hours. Long positions accounted for more than $2.2 billion of that total. According to CoinGlass data, in the past 24 hours, 586,053 traders were liquidated, with total liquidations reaching $2.65 billion, CoinGlass reported. Crypto Market Total Liquidation. Source: CoinGlass CoinGlass data also shows that the smallest event in the Top 10 Crypto Liquidation Events of All Time occurred recently on January 31, with $2.56 billion in liquidations. This suggests the ranking could soon be reshuffled. The market analysis account, The Kobeissi Letter, explained that this move is not a short-term shock. It reflects a structural downturn that has been developing since October last year. What is happening in crypto?Since October 10th, crypto markets are now down -50%, erasing $2.2 TRILLION worth of market cap.Bitcoin has officially erased ALL of its post-election rally, now down -10% since Trump's election.Why is it crashing? Let us explain.(a thread) pic.twitter.com/h8ekQdhWSG The Kobeissi Letter (@KobeissiLetter) February 5, 2026 The root causes include weak liquidity, negative sentiment, and cascading liquidation pressure across markets. The account emphasized that this is a recurring cycle: liquidations damage sentiment, and worsening sentiment triggers further liquidations. Bitcoins intraday price swings of up to $10,000 were attributed to sharply reduced market depth. The current Bitcoin market depth is only 30% of its October peak. This condition mirrors the post-FTX collapse environment seen in 2022. Bitcoin Market Depth. Source: The Kobeissi Letter A BeInCrypto report noted that ongoing panic selling has pushed many crypto treasuries toward rising bankruptcy risk. Bitcoins drop to $60,000 pushed MicroStrategys holdings below cost basis, increasing balance-sheet pressure. Against this backdrop, veteran technical analyst Peter Brandt offered a forecast based on the Bitcoin Power Law model. He suggested that Bitcoin could trade within a banana peel range, with potential support near $42,000. If Bitcoin $BTC digs into the Banana peel as deeply as in past bear market cycles, then the bulls should not need to suffer too far south of $42,000We are a hop, skip and jump from there pic.twitter.com/1GPr7RnIPB Peter Brandt (@PeterLBrandt) February 5, 2026 Brandt argued that if Bitcoin enters this zone, similar to previous bear cycles, bullish investors are unlikely to remain below that level for an extended period. Is a Major Opportunity Taking Shape? Despite the bleak outlook, not all analysts remain pessimistic. Glassnode reported that Bitcoins capitulation index recorded its second-largest spike in the past two years. This signals a sharp rise in forced selling. The metric tracks supply held at different price levels and measures market stress to identify potential local bottoms. Such stress events often coincide with rapid de-risking and heightened volatility. Investors rebalance positions during these phases. Bitcoins Capitulation Metric. Source: Glassnode Large-scale liquidations also reduce overall market leverage. This process drives a shift away from leveraged speculation toward spot accumulation. Weak hands exit, making room for higher-conviction investors. Bitcoin deleveraging may create a strong opportunity soon, economist Daniel Lacalle noted. These observations suggest a buying opportunity may be forming. They do little, however, to pinpoint exactly when a recovery will begin.