$2.6 Billion Thursday Wipeout: What Caused the Latest Bitcoin and Altcoin Crash?

Analysts explain what happened in the crypto markets over the past 24 hours and whether the worst is behind us.

But in this article we will focus more on yesterday’s events rather than the overall decline of the past few months. In the span of just 24 hours, the cryptocurrency plummeted from $77,000 to $60,000, marking one of the worst single-day trading performances since its inception.

Several altcoins posted even bigger losses of up to 20%, as was the case with XRP. According to Coinglass data, the total value of the destroyed positions shot up to $2.6 billion in just one day. Nearly 600,000 traders were liquidated.

Despite bouncing off local lows, BTC and the altcoins have erased months and years of gains, returning to levels last seen before the US presidential election in late 2024. During and after similar calamities, the most obvious question is why. Here is an overview through the eyes of the Kobeissi letter.

What happened?

First, the analyst reassured that while Bitcoin has plummeted by more than $30,000 in recent months, the “fundamental picture for crypto” has remained “largely unchanged.” They added that the answer to why the asset class is plummeting lies in the October 10 crash, when more than $19 billion in leveraged positions were wiped out. They believe that ‘something structural’ changed that day.

To answer this question we have to go back to October 10.

The most recent TOP in crypto came on October 6, just four days before the record -$19.5 billion liquidation.

On October 10, something seems to have changed structurally.

And the markets never really recovered. pic.twitter.com/l07mKRBAbQ

— The Kobeissi Letter (@KobeissiLetter) February 5, 2026

Although BTC remained completely within the range for two months between November 15 and January 15, analysts said there were brief periods of liquidation with “gaps” in both directions, which was another sign of the market’s structural collapse. They noted that sentiment is “all that matters” during crypto cycles, and that this sentiment was broken after the October crash.

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“The result is a huge virtuous cycle, shifting from liquidations to a deterioration in sentiment, and vice versa. Since January 24, we have seen $10 billion in leveraged positions liquidated. That’s about 55% of the record amount of October 10. It’s a structural decline.”

The analysts provided more evidence showing the nature of the structural collapse, including the spread of selling pressure to other asset classes, and that BTC market depth, the capital available to absorb large orders, is still more than 30% below its October peak. The last time it reached such numbers was after the FTX crash in 2022.

Finally, the Kobeissi letter indicated that a major player, perhaps an institution, was sold or liquidated during the violent trading session, given BTC’s rapid and massive correction.

Today’s drop was particularly notable as Bitcoin fell over $9,000 and selling pressure was constant.

Sometimes Bitcoin would drop $2,000+ in a matter of minutes.

It appears that a major player, perhaps an institutional investor, sold/liquidated during today’s session. pic.twitter.com/EWnLxUT1Vl

— The Kobeissi Letter (@KobeissiLetter) February 5, 2026

When bottom?

The second popular question after the crypto market collapse is whether we have hit bottom or whether there is more pain ahead. The analysts responded that bitcoin would fall once “structural liquidity is restored.”

“This will be a combination of both capitulation in price and leverage, as well as maximum bearish sentiment.”

The good news is that they added, “It appears we are somewhat close to that point.”