Analysts explain what took place in the crypto markets in the past 24 hours or so, and whether the worst is behind us.
It’s safe to say that this is no longer a bull phase. After all, BTC dumped by more than 50% since its October all-time high and plummeted to around $60,000 late on Thursday.
But in this article, we will focus more on the events that took place yesterday than on the overall decline over the past several months. In the span of just 24 hours, the cryptocurrency plummeted from $77,000 to $60,000 in one of its worst single-day trading performances since its inception.
Multiple altcoins registered even more profound losses of up to 20%, as was the case with XRP. The total value of wrecked positions in just one day shot up to $2.6 billion, according to Coinglass data. Nearly 600,000 traders were liquidated.
Despite bouncing off local lows, BTC and the altcoins erased months and years of gains, returning to levels last seen before the US presidential elections at the end of 2024. During and after similar calamities, the most obvious question is why. Here’s a breakdown through the eyes of the Kobeissi Letter.
What Happened?
First things first, the analyst reassured that although bitcoin has plummeted by over $30,000 in the past couple of months, the “fundamental picture for crypto” has remained “vastly unchanged.” They added that the answer to why the asset class is tanking lies in the October 10 crash, when over $19 billion in leveraged positions were wiped out. They believe “something structural” changed on that day.
The answer to this question requires going back to October 10th.
The most recent TOP in crypto came on October 6th, just 4 days before the -$19.5 billion record liquidation.
Something structural appears to have shifted on October 10th.
And, markets never truly recovered. pic.twitter.com/l07mKRBAbQ
— The Kobeissi Letter (@KobeissiLetter) February 5, 2026
Although BTC remained entirely rangebound for two months between November 15 and January 15, the analysts said there were brief periods of liquidation with “gaps” in both directions, which were another sign of the market’s structural collapse. They noted that sentiment is “all that matters” during crypto cycles, and it was broken after the October crash.
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“The result is a massive virtuous cycle, shifting from liquidations to sentiment deterioration, and back. Since January 24th, we have seen $10 billion worth of levered positions liquidated. That’s ~55% of the record amount seen on October 10th. It’s a structural decline.”
The analysts offered more evidence showing the nature of the structural collapse, including the spread of selling pressure into other asset classes, and that BTC’s market depth, the capital available to absorb large orders, is still more than 30% below its October peak. The latest time it hit such numbers was after the FTX crash in 2022.
Lastly, the Kobeissi Letter indicated that a large player, perhaps an institution, sold or was liquidated during the violent trading session, given BTC’s rapid and massive correction.
Today’s decline was particularly noteworthy as Bitcoin fell over -$9,000 and selling pressure was constant.
At times, Bitcoin would fall $2,000+ in a matter of minutes.
It seems that a large player, perhaps an institutional investor, sold/liquidated during today’s session. pic.twitter.com/EWnLxUT1Vl
— The Kobeissi Letter (@KobeissiLetter) February 5, 2026
When Bottom?
The second popular question after a crypto market collapse is whether we have bottomed out or if there is more pain ahead. The analysts answered that bitcoin would bottom once “structural liquidity is restored.”
“This will be a combination of both capitulation in price and leverage, as well as maximum bearish sentiment.”
The good news is that they added, “we seem to be somewhat near that point.”
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