On February 6, 2026, at 8:00 AM UTC+8, the cryptocurrency market experienced a severe systemic correction, with mainstream assets like Bitcoin, Ethereum, and SOL collectively plummeting, triggering forced liquidations amounting to billions of dollars across the network. Bitcoin briefly fell below the $60,800-$60,900 range, Ethereum dropped below $1,800, and SOL fell below $70, causing the total cryptocurrency market capitalization to shrink to approximately $2.267 trillion, evaporating over 10% of its value within 24 hours. Liquidation data indicated that the scale of this round of liquidations reached $1.8-$2.1 billion, with long positions accounting for the vast majority. Meanwhile, the off-exchange price of USDT was briefly raised to 7.1 RMB, contrasting sharply with the panic selling on the exchange. There was also a divergence between on-chain and institutional activities: on one side, entities related to Michael Saylor (Strategy) reported unrealized losses exceeding $10.16 billion, and entities related to Tom Lee (Bitmine) faced unrealized losses of about $8.65 billion; on the other side, whale addresses aggressively increased their positions and engaged in collateralized lending during the downturn. The divergence between institutions "holding on to massive losses" and whales "buying the dip" introduces new uncertainties for the trend following this correction.
Bitcoin Breaks Below $61,000 and the Price and Structural Signals of $1.8 Billion in Liquidations
● Daily Decline of Mainstream Coins: On February 6, Bitcoin hit a daily low of $60,800-$60,900, with a 24-hour decline of approximately 13%-17%, marking one of the largest single-day declines this year; Ethereum also fell below $1,800, with a decline of about 15%-16%; SOL amplified the beta of risk assets, with a daily drop exceeding 20%-24%, briefly falling below $70, indicating that high-elasticity assets faced more severe selling pressure during the systemic correction.
● Total Market Capitalization Decline: Under the drag of multiple assets declining simultaneously, the overall cryptocurrency market capitalization quickly fell from its peak to about $2.267 trillion, with a single-day decline exceeding 10%. This scale of market capitalization shrinkage is close to that of a medium-sized traditional stock market "flash crash," directly pressuring the sentiment and margin safety of both on-exchange and off-exchange investors, pushing some passive funds towards reduction and deleveraging.
● Long and Short Liquidation Structure: According to liquidation data, the scale of forced liquidations across the network in this round was in the range of $1.8-$2.1 billion, with long positions liquidating approximately $1.6-$1.8 billion, while short positions only accounted for about $200-$270 million. The comparison between longs and shorts shows a very high proportion of long positions, presenting a typical one-sided long liquidation structure, indicating that the previously accumulated leveraged long positions in the market were concentrated and cleaned out, while shorts did not face a proportionate forced exit, resulting in a price drop with obvious "longs killing longs" characteristics.
● USDT Premium and On-Exchange Panic: In contrast to the market crash, the off-exchange USDT price was briefly raised to 7.1 RMB, significantly above the normal exchange rate level. This indicates that while on-exchange contracts and spot markets were passively deleveraging, there was still active buying or currency exchange demand off-exchange, reflecting a dislocated pattern of "panic selling on-exchange, aggressive buying off-exchange," leaving uncertainty about whether organized bottom-fishing funds would emerge.
● Relative Position to Past Cycles: In terms of decline and panic levels, although this round of correction did not replicate the extreme collapse of several percentage points in a single day during the 2022 bear market, such a synchronized sell-off in the current cycle, viewed as the latter half of an upward or oscillating phase, represents a phase "reset" of leverage and sentiment. This adjustment structure resembles a high-volatility washout within a bull-bear transition range, rather than a simple tail-end crash of a trend.
Fear Index Drops to 9: The Combination of Emotional Selling and Technical Chain Reactions
● Extreme Fear Reading: On February 6, the fear and greed index published by Alternative.me dropped to 9, marking a new low since the 2022 bear market. This reading has deeply entered the "extreme fear" zone, indicating that the vast majority of market participants are inclined to stop-loss, reduce positions, and wait on the sidelines, rather than continue to leverage for a rebound, with the emotional dimension amplifying the existing downward trend.
● High Leverage and Technical Resonance: Against the backdrop of sustained price increases and long-term market optimism, a large number of long contracts accumulated at relatively high levels. When Bitcoin broke below key integer and technical support levels, it triggered a chain reaction of forced liquidations, compounded by follow-up stop-loss sell orders, creating self-reinforcing technical selling pressure. Simultaneously, sentiment shifted from optimism to panic in a very short time, with some traders manually reducing positions before forced liquidations, further exacerbating the volume increase and price slippage in a short period.
● Interaction of Contract Liquidations and Spot Selling: During this decline, a typical path of "contracts first, long positions passively liquidated, spot forced to follow" can be observed. First, highly leveraged long positions faced insufficient margin under rapid price corrections, leading to passive liquidations that pushed prices down; subsequently, some spot holders chose to sell their holdings to cover contract losses or margin requirements, and the selling pressure in the spot market further dragged down the prices of contract targets, causing subsequent batches of long positions to be caught in the liquidation waterfall, forming a closed-loop negative feedback between price, margin, and liquidation.
● Risk of Deeper Declines: In such extreme market conditions, opinions about "Bitcoin possibly dropping further to $42,000" began to spread widely on social media, but these are more subjective predictions driven by sentiment. Currently, there is a lack of sufficient data and technical pathways to validate this specific target, and this analysis can only regard it as information pending verification, rather than a directly applicable research conclusion, to avoid misinterpreting social sentiment as a definitive trend.
Wall Street's Billions in Unrealized Losses and Divergence Signals from On-Chain Accumulation
● Institutional Massive Unrealized Loss Data: Estimates from on-chain analysis tool Onchain Lens show that entities related to Michael Saylor (Strategy) reported unrealized losses of about $10.16 billion after this round of decline, while entities related to Tom Lee (Bitmine) faced unrealized losses of about $8.65 billion. Such billions in unrealized losses indicate that the historical cost basis of leading institutions has been significantly penetrated, but so far, there have been no public signals of large-scale reductions or liquidations, with perceptions still leaning more towards "long-term holding under pressure" rather than "phase surrender."
● Impact on Cycle Expectations and Confidence: Such a scale of unrealized losses poses a dual test for institutional investors regarding their holding cycles and the long-term narrative of crypto assets. On one hand, if they choose to continue holding, it will reinforce their image as "cycle crossers," providing some confidence anchors for the market; on the other hand, if some institutions choose to quietly reduce positions during subsequent rebounds, it will amplify the pressure on price increases, and retail investors may interpret any unusual selling pressure as "whales fleeing," thus amplifying volatility.
● Whale 7 Siblings' Contrarian Accumulation: Unlike traditional institutions suffering passive unrealized losses, on-chain analyst Ai Yi tracked the whale address 7 Siblings, which increased its position by 17,757 ETH during the downturn and used it for collateralized lending. This on-chain behavior indicates that such high-net-worth entities are more inclined to view this round of decline as an opportunity for long-term allocation or leverage expansion, betting on future price recovery to amplify returns, rather than simply defending passively.
● Contrast of Different Risk Preferences: Within the same time window, on one end, large institutions choose to "hold on in pain" in the face of massive unrealized losses, enduring prolonged market value fluctuations; on the other end, proactive whales choose to accumulate on dips and leverage tools. These two strategies reflect the internal divergence in the market regarding risk preferences and time perspectives: the former focuses more on long-term narratives and compliance constraints, while the latter seeks higher price elasticity with a greater risk tolerance. This divergence also implies that if prices rebound later, the timing of profit-taking and selling paths may exhibit significant misalignment.
Liquidity Signals from the Decline of US Stocks and Precious Metals
● Risk Assets Under Pressure: During the cryptocurrency market crash, traditional financial markets also showed significant weakness, with S&P 500 futures down about 1% and Nasdaq futures down about 1.6%. This synchronized pullback in U.S. stock futures reflects overall pressure on global risk assets, rather than an isolated event for crypto assets, with funds actively reducing risk exposure on a larger scale.
● Unconventional Decline in Gold: More significantly, the traditionally safe-haven asset gold saw a decline of about 2.51% during the day. In classic macro scenarios, a weakening of risk assets is usually accompanied by a strengthening of gold, but the simultaneous decline of stocks, crypto, and gold suggests that this is not merely a rotation of risk sentiment, but rather that some market participants are overall reducing their balance sheets and increasing cash ratios, even cutting back on safe-haven positions.
● Transmission of Tightening Liquidity: In this framework of a global shift in funding preferences, the cryptocurrency market crash can be seen as a high-beta manifestation of tightening liquidity or a sudden drop in risk appetite. The cross-market migration of funds between traditional risk assets and crypto makes crypto assets the first to be "sold off and deleveraged," and when external financing costs rise or macro uncertainties increase, the most volatile segments are often the first to be sacrificed.
● Distinction Between Macro Pressure and Industry Black Swans: It is important to emphasize that this round of correction, based on existing information, aligns more with the model of "macro liquidity pressure + high leverage chain reactions," rather than being triggered by a single industry black swan event (such as regulatory crackdowns or a single platform collapse). In macro pressure scenarios, sell-offs tend to be more universal, with a slower rhythm, but may last longer; whereas industry black swans typically manifest as extreme cliff-like collapses of specific assets or platforms, with more directed transmission paths.
Off-Exchange Funds and Cognitive Mismatches Under USDT Premium Fluctuations
● Off-Exchange Premium Reflects Funding Demand: During the significant drop on February 6, the off-exchange USDT price briefly surged to 7.1 RMB, clearly higher than the normal exchange rate level. This premium indicates that despite the market crash and leveraged selling, there remains a substantial active demand off-exchange for those willing to exchange their local currency for USDT, reflecting that some funds hope to utilize low prices to allocate crypto assets or have real needs for cross-border asset allocation and hedging.
● Coexistence of Premium and Plunge: When off-exchange USDT premiums and on-exchange price declines occur simultaneously, it usually means "some are panicking and fleeing, while others are eager to enter." On one hand, funds driven by forced liquidations and stop-losses are selling on-exchange, pushing prices down rapidly; on the other hand, new entrants or additional funds are purchasing USDT through off-exchange channels, preparing to gradually take positions on-exchange. This structural divergence in fund flows makes it difficult to determine the true intentions of dominant funds based solely on price movements.
● Constraints Due to Missing Key Data: Currently, this analysis lacks key data such as the flow of spot ETF funds and changes in reserves at major exchanges, making it impossible to quantitatively define who the main players are in this round of decline and potential bottom-fishing. Without these core fund flow indicators, hastily interpreting USDT premiums as "institutions fully bottom-fishing" or "retail investors mindlessly buying the dip" can easily lead to excessive extrapolation traps.
● Misreading Risks in Information Asymmetry: In an environment of incomplete information and lagging data, traders can easily absolutize localized signals, such as interpreting a one-time USDT premium as confirmation of a long-term bull market, or viewing a brief premium retreat as a "failed bottom." This linear inference based on a single indicator carries significant risks in a highly volatile market. A more prudent approach is to cross-validate off-exchange premiums with multiple signals such as trading volume, futures basis, and large on-chain transfers, rather than interpreting them in isolation.
After the Severe Correction: Escalation of Divergence or Repair of Consensus
The systemic correction on February 6 left clear numerical marks across multiple dimensions: Bitcoin briefly fell to $60,800-$60,900, Ethereum dropped below $1,800, SOL experienced a daily decline of over 20%-24%, and the total cryptocurrency market capitalization shrank to approximately $2.267 trillion; the scale of liquidations across the network reached $1.8-$2.1 billion, with long positions liquidating about $1.6-$1.8 billion, the fear and greed index dropped to 9, U.S. stock index futures and gold fell in tandem, and the off-exchange USDT premium surged to 7.1 RMB. Price, leverage, sentiment, and cross-market interactions collectively formed a typical high-volatility reshuffle.
In terms of holding behavior, institutions and whales exhibited two distinctly different choices: on one side, large institutions like Strategy with unrealized losses of about $10.16 billion and Bitmine with unrealized losses of about $8.65 billion still chose to endure significant paper drawdowns; on the other side, the whale address 7 Siblings increased its position by 17,757 ETH against the trend during the crash and amplified leverage through collateralization. This divergence between "holding on to massive losses" and "buying the dip" will directly influence the slope and rhythm of subsequent price fluctuations—if institutions choose to reduce pressure during a rebound, it may suppress upward potential; if whales successfully profit from this round of lows, it will further reinforce the market sentiment of "buying the dip rather than buying the rise" during the emotional recovery period.
It is essential to repeatedly emphasize that in the absence of core fund flow information such as spot ETF redemption data and changes in exchange reserves, any judgments about "who is leading the bottom-fishing" or "whether a bottom has been reached" inherently carry significant cognitive blind spots. Absolutizing a single data point or sentiment indicator will amplify the risk of misjudgment.
In the medium to short-term dimension, a more sustainable focus framework should center on three main lines: first, changes in macro liquidity and global risk appetite, including interest rate expectations and the resonance direction of U.S. stocks and gold; second, the flow trajectories of large on-chain addresses and institutional wallets, observing whether there are signals of sustained net inflows or reductions; third, the rhythm of sentiment indicators moving from extreme fear towards neutral recovery, and how this aligns with the speed of futures leverage reconstruction. Until these key variables are sufficiently clarified, focusing on risk management and position elasticity control, rather than fixating on a specific price point for "divine predictions," may better align with the survival logic of the current stage.
Join our community to discuss and become stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh
OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
