Over $2.5 billion in crypto positions were liquidated as Bitcoin and Ethereum plunged, wiping out overleveraged traders in one of the year’s biggest market shakeouts.
Last Updated: February 04, 2026 at 2:15 PM UTC +1
Published: February 04, 2026 at 2:15 PM UTC +1
Human Written ContentHuman Written Content
Or as I would like to call it: how one more 50x became a financial crime scene.
Yes, welcome back to the crypto market that is once again doing its adorable thing where it decides to lead everyone to the edge of a cliff, and whispers sweet nothings into your ear about how you should simply just trust them. Then you get kicked off with their steel-toed boots.
Over the course of… a very short period of time, more than $2.5 billion (we have to start getting used to that being a baby number here) in leveraged crypto had just been obliterated. It has been reduced to nothing more than a mere, cautionary tale. Bitcoin slipped, Ethereum is catching a cold, and suddenly those traders are staring at those despicable liquidation notices as if they were a Victorian child handed an iPad.
No, this was not some hack nor an accident. This is something leverage has been doing since the dawn of time – that confidence poofs into confetti!
Stop chewing your nails, I have not even gotten to the saucy part. Prices dipped, those key support levels cracked, and leverage began toppling over like dominos.
Once those prices go past a certain threshold, exchanges are going to start closing to cover up those losses. This incoming pressure pushed prices lower, which means even more liquidations have become triggered. Those prices just keep getting pushed lower and lower… and lower. Even experts now have to adjust their monocles and are thinking, “What in the world is happening?”
The longest standing positions took the brunt of the impact. So, if it is not the consequences of their own actions. Imagine me shaking my head writing this (because that is exactly what is happening). All of this, of course, decided to unfold during a period of thinning liquidity. Imagine you go to the grocery store before a storm has hit, and you just grabbed the only cart with three wheels. Yes, this is what the market is currently dealing with. Fun, right?
Yes, let us now go over the wreckage. The total liquidations, if you did not read the title or my previous words, are over $2.5 billion. Bitcoin and Ethereum are going to be the assets that get hit the hardest, whilst altcoins are going to catch some strays.
“This is fine,” says the dog meme as it sits around a burning building.
Some of these positions were wiped out so fast, there was no time to even emotionally process what even happened. The entirety of trading accounts went from a successful retirement plan to fall back onto, to just the beginning of your character development arc… all over again.
No one made a mistake, or pressed the wrong button. Larger players were also harmed during this. Leverage does not know what discrimination is, so you all can suffer together. All men are created equal – kind of a full circle moment.
“Why do traders keep doing this?” Great question, imaginary friend that probably did not even ask this. Leverage is a tricky tactic. It will whisper, like a siren to a sailor, promises such as, “There is no need for patience,” or how risk management is just for coward. Or maybe how this time is different!
Exchanges are going to offer leverage, because it is meant to drive volume, fees, and engagement. All the while traders are trying to convince themselves that they will be the exception. Oh, you thought you were using that 50x responsibly? You are no better than a toddler with a flamethrower and a dream.
As expected, these prices were bouncing around as if they just consumed six espressos and now have to suffer a nervous breakdown. With the volatility now spiked, the trading volume has exploded. Social media is a current mix of panic, bravado (if they bought the dip), and perhaps some, a spiritual awakening.
This could be seen as a healthy reset for some, so do not beat yourself up. Others, maybe this can be a warning flare for you – the market is viciously addicted to borrowed confidence. Both of these reactions are right. That is the annoying part.
Traders continued to post their charts, screenshots, or perhaps a dated philosophical graphic about fate and destiny. All that jazz. At least one theme united everyone for just a moment. None of them could have anticipated this to happen.
This has nothing to do with price movement. It is just a sheer, despicable reminder that despite all that talk regarding how numbers will always go up, crypto markets are as fragile as a Jenga tower on its last leg. Leverage will maximize those gains, but also those mistakes. As markets continue to grow faster, and therefore becoming much more complex, these liquidation events are to be more frequent and inevitable.
The question is not if this is going to happen again. It is how soon and how much larger of a scale. This is not financial advice. This is common sense. Leverage is not a strategy in the slightest, it is a multiplier. If you only have a plan when the market is on its best behavior, then look! You have a cute little wish – not even close to a plan.
Risk management is not boring. This is your survival. Last I checked, that is necessary for profit. The market did not break, you can settle down there. The system is not failing. Traders were simply dashing towards that leverage like cartoon characters before they look down and see they just ran off a cliff.
The cliff is still there. Leverage still works. Just… do not think you are different. If you do, then good luck, soldier. You will need it.
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