Liquidation of the cryptocurrency market reached a record $ 2.65 billion per day

In early February, the crypto market came under intense pressure: a wave of liquidations wiped out billions of dollars in positions, and every attempt to recover the price was quickly interrupted by new falls. A series of «red» candles on the charts fueled panic among traders, although some analysts are already seeing the first signs of stabilization, without expecting a quick rebound.

According to CoinGlass, liquidations reached $ 2.65 billion in the last day alone, with more than $ 2.2 billion of that coming from long positions. In total, more than 586 thousand deals were closed. At the end of January, the market had already experienced one of the largest liquidation episodes in history — $ 2.56 billion per day, which indicates the systemic nature of the current downturn.

The Kobeissi Letter analysts explain that the problems have been accumulating since October last year. Weak liquidity, negative sentiment, and the domino effect of forced position closures led to sharp intraday fluctuations in bitcoin, which fell by $ 10,000 per day. The current market depth is only about 30% of the level of the fall of 2024, a figure comparable to the period after the FTX crash in 2022.

Bitcoin’s drop to $ 60,000 has created additional risks for companies with large crypto reserves. In particular, MicroStrategy’s stocks fell below the average purchase price. Technical analyst Peter Brandt predicts that the price may fluctuate in a wider range for some time with potential support around $ 42,000, but is unlikely to stay there for long, as it did in previous bearish cycles.

Despite the overall negative backdrop, some indicators point to an opportunity for long-term investors. Glassnode recorded the second largest surge in its surrender index in the last two years, which means massive forced sales and deleveraging. Economist Daniel Lacalle believes that the deleveraging process could create a strong investment opportunity, although the exact timing of the market reversal remains uncertain.