$2.5 Billion Wiped Out Saturday: Analysts Explain Why Bitcoin and Altcoins Crashed

Hint: They didn’t blame the Fed or tensions in the Middle East.

However, yesterday’s price shock had no such clear catalyst to blame. On the contrary: BTC had already fallen on Thursday after the US Federal Reserve left interest rates unchanged, and Trump sent part of the country’s navy closer to Iran. Moreover, Bitcoin and the altcoins even recovered some ground on Friday as the precious metals market collapsed.

So, what’s the reason?

The Kobeissi Letter analysts also rejected arguments that Saturday’s meltdown had anything to do with the situation in Iran or the Fed’s latest actions. Instead, they said, “It’s purely a liquidity situation.” Their chart shows three clearly defined liquidation waves, totaling approximately $1.3 billion in the space of just twelve hours.

“In a market where liquidity is choppy at best, sustained levels of extreme leverage result in “air pockets” in the price.

Couple this with a herd feeling, which is constantly shifting from extreme bullishness to extreme bearishness, and the swings become even more aggressive,” they say. explained.

Furthermore, the analysts added that this could be a “great time to capitalize [on] polarity in emotion and price.”

10th largest liquidation event

The aforementioned $1.3 billion liquidated in just 12 hours was only part of the total amount wiped out by over-indebted investors. CoinGlass data showed at one point that the total value of the destroyed positions had skyrocketed to more than $2.5 billion.

According to further data from the Kobeissi Letter, this puts yesterday’s crash 10th in terms of daily liquidations.

BREAKING: $2.5 billion worth of levered longs in crypto have been liquidated in the past 24 hours.

This makes today the 10th largest liquidation event in crypto history.

— The Kobeissi Letter (@KobeissiLetter) January 31, 2026

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The undisputed leader here was from October 10, when the entire market plummeted. Within 24 hours, investors had lost more than $19 billion through liquidations.