Why is Crypto Crashing Today? Inside the $841M Sell-Off & Burry’s ‘Death Spiral’ Warning

The crypto market is under heavy pressure once again, with prices across major tokens sliding sharply as fear grips investors and liquidations pile up.

The total cryptocurrency market capitalization has dropped to $2.41 trillion, down 6.64% in the past 24 hours. Market sentiment has deteriorated fast, with the Fear and Greed Index sinking to 11, as per CoinMarketCap data, placing crypto firmly in extreme fear territory.

The crypto market entered extreme fear territory on Thursday as Michael Burry warned of a potential ‘black hole’ in tokenized assets, triggering a $841 million liquidation cascade that sent Bitcoin spiraling to $70,500.

Bitcoin, Ethereum, Solana, XRP, and BNB are all trading lower, extending what has already been a brutal week for digital assets.

What is driving the crypto market crash?

This sell-off is not being driven by a single event. Instead, it is the result of rising global risk aversion, weak follow-through buying, and a sharp unwind of leveraged positions.

A sell-off in global technology stocks earlier this week spilled into crypto markets, pushing traders into risk-off mode. Once Bitcoin fell below key support levels, selling picked up fast and liquidations spread across the market.

According to CoinGlass data, 173,663 traders were liquidated in the last 24 hours, with total losses hitting $841.87 million. Most of the losses came from long positions, which accounted for over $703 million of the total.

The biggest single liquidation happened on Aster, in the BTCUSDT pair, and was worth $11.36 million.

Bitcoin price falls below key levels

Bitcoin is currently trading at $70,748.46, down 7.46% over the last 24 hours. Its market capitalization stands at $1.41 trillion, while 24-hour trading volume rose 18.07% to $80.62 billion, as selling activity picked up sharply.

The price slipped to $70,544.96 during the session, pushing Bitcoin’s weekly losses close to 20%. The decline has been steeper than the broader crypto market.

Liquidations added to the pressure. Bitcoin saw $401.14 million in liquidations over 24 hours, with $355.56 million coming from long positions.

Institutional demand has also dropped. Spot Bitcoin ETFs kept seeing outflows, and assets under management fell from $110.92 billion to $105.63 billion, removing an important source of support.

Technically, Bitcoin breaking below the $75,000 to $78,000 range triggered automated selling, and momentum indicators moved into deeply oversold territory.

This also marks the lowest level for Bitcoin since US President Donald Trump took office in January 2025, signaling that the post-election ‘Trump Pump’ has fully retraced.

Ashish Singhal, Co-Founder of CoinSwitch, commented saying: “BTC is currently trading below $72K. The move lower lacked a clear catalyst and appears largely sentiment-driven, with even constructive US–China commentary from President Trump failing to lift risk appetite.”

He even added, “As price slipped below the $73K–$74K support zone, it entered an area of dense long leverage, triggering forced liquidations and accelerating downside momentum, effectively pulling BTC toward the $72K liquidity pocket. Immediate support now sits near $71.5K, while a clean break could expose the $66K–$68K zone. Unless BTC reclaims $75K, near-term risk stays skewed to further downside or volatile consolidation.”

Ethereum extends weekly decline

Ethereum has followed Bitcoin lower and is currently trading at $2,087.00, down 7.95% in 24 hours.

ETH’s market capitalization has dropped to $251.88 billion, down 8.1%, while 24-hour trading volume rose to $49.82 billion, suggesting selling pressure remains elevated.

Ethereum fell to $2,096.94 during the session and is now down 28.87% over the past week. The move comes as ETH broke important Fibonacci support levels, with the RSI 14 sliding to 23.52, indicating extreme oversold conditions.

Adding to the pressure, US spot Ethereum ETFs have continued to record redemptions, weakening demand at a time when confidence is already fragile.

Ethereum saw $206.20 million in liquidations in the last 24 hours, with long positions accounting for the majority of losses.

Solana slides as liquidations build

Solana is trading at $90.19, down 8.31% over the last 24 hours. Its market capitalization now stands at $51.1 billion, while trading volume climbed to $7.92 billion.

SOL briefly slipped to $89.75, underperforming the broader market. The decline has been amplified by leverage unwinding, with more than $70 million in Solana long positions liquidated in a single day.

Technically, Solana has broken below its recent swing low, and momentum indicators continue to point lower. Total SOL liquidations reached $72.01 million, most of which came from long positions.

XRP drops into double-digit losses

XRP has been one of the worst performers among major tokens. The asset is trading at $1.42, down 10.58% over the past 24 hours.

Its market capitalization has dropped to $86.99 billion, while trading volume jumped nearly 30% to $5.28 billion, showing heavy selling pressure.

XRP is now down 24% over the past week, after breaking below the key $1.60 support level, which sped up the downward move.

BNB under pressure amid broader sell-off

BNB is trading at $691.44, down 9.18% in the last 24 hours. Its market capitalization stands at $94.28 billion, while trading volume surged 36.12% to $3.67 billion.

The token has now extended its weekly decline to over 23%, dragged down by the broader market sell-off, liquidations, and ongoing negative sentiment around Binance.

BNB has also broken below key support levels and is now trading in oversold territory.

Michael Burry flags wider risks from Bitcoin’s fall

US hedge fund manager Michael Burry, best known for predicting the 2008 housing crisis, has warned that Bitcoin’s decline could have knock-on effects across markets.

Bitcoin recently fell to its lowest level since US President Donald Trump took office in January 2025, briefly slipping below $72,000. The cryptocurrency is now down nearly 17% in 2026, while the broader crypto market lost more than $460 billion in value last week.

In a February 2 Substack post, Burry wrote, “It looks like up to $1 billion in precious metals were liquidated at the month’s very end as a result of falling crypto prices.”

He warned that mining firms could face bankruptcy if Bitcoin drops to $50,000, and said the market for tokenized metals futures could “collapse into a black hole with no buyer.”

Bloomberg reported that data from Polymarket shows an 82% probability of Bitcoin falling to $65,000 in 2026. Bloomberg analyst Mike McGlone has gone further and said Bitcoin could fall as much as 87%, with prices possibly dropping close to $10,000. He compared it to what happened in the 2008 financial crisis.

The crypto market has been weak since the sudden crash in October 2025 that wiped out billions in liquidations. The total market is now around $2.5 trillion, down from over $4 trillion at its peak.

Bitcoin hasn’t benefited from geopolitical tensions or a weaker dollar. ETF inflows have slowed, liquidity is tight, and prices keep falling.

Fear is still high, and liquidations are continuing. The market could fall further.

Also Read: Nearly $500B Lost: Why Bitcoin Holders Are Panicking Right Now

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