Bitcoin has experienced a sharp decline over the past 24 hours, pushing its price to around $60,000 in an accelerating decline comparable to the 2022 FTX collapse.
According to , BTC has recovered to $69,800 at the time of writing. crypto slate data.
Still, Glassnode’s data helped reveal how much the price has fallen compared to widely monitored on-chain reference points.
While spot prices have plummeted, leading on-chain pricing models are much higher, including $94,000 on an STH cost basis, $86,800 on average active investors, and $80,100 on true market average.
Meanwhile, the realized price of the flagship digital asset remained at $55,600.
Given this, this price movement prompted traders to look for a single “clash”, even though the available evidence pointed to a more mechanical unwinding.
X fills in the gaps with theory, but little evidence.
As the price of Bitcoin fell rapidly, social media became a clearinghouse for speculation, with stories moving almost as fast as the price.
X traders have floated multiple explanations for the decline, including rumors of a hidden Hong Kong hedge fund explosion, yen funding stress and even quantum security concerns.
However, there is a common problem with these claims. It is difficult to verify in real-time, and none of it is accompanied by publicly documented evidence that could, on its own, explain the scale and timing of the movement.
Not all rumors are false, but this pattern is well known in fast-moving markets. Rapid liquidation events create narrative gaps that the internet attempts to fill, often before the underlying factors can be clearly measured.
Considering this, crypto slate A more robust explanation for the past 24 hours lies in on-chain data showing observable plumbing, ETF flow pressure, forced leverage positions, and large holders moving coins to exchanges.
This is less cinematic than a single surprise catalyst, but more in line with how crypto crashes tend to propagate once they start.
ETF outflows and liquidation cascades impact bidding
The cleanest and most measurable headwind is the relentless selling via the US Spot Bitcoin ETF.
Over the past four months, Spot Bitcoin ETFs have seen more than $6 billion in net outflows, according to data from SoSo Value.
In reality, this kind of continuous withdrawal is important because it changes who is on the other side of the transaction. When inflows are high, the market may rely on stable price-sensitive buyers. If capital outflows continue, that support may become intermittent and it may feel like there are fewer natural bids.
Bloomberg ETF analyst James Seifert said Bitcoin ETF holders as a whole have suffered the biggest losses since the ETF was launched in January 2024 due to the Bitcoin price crash.
He added that the ETF has experienced Bitcoin’s worst rate of decline since its launch, with Bitcoin currently trading at less than $73,000 with a loss of about 42%.
These numbers are not one-day triggers, but they change the market structure. In a market accustomed to stable demand for ETFs, if capital outflows continue, the scale of “automatic market buying” will diminish, and as stops and liquidations begin, the downward price break will become more intense.
Your pitch doesn’t have to be dramatic. It just needs to be persistent enough to blunt the rebound and dilute liquidity at key levels.
And when Bitcoin price passed through a key level, forced selling amplified the move. More than $1.2 billion in leveraged positions were liquidated as Bitcoin sank to record lows, according to data from CoinGlass.
This represents a dynamic that can turn discretionary sales into a mechanical cascade.
This sequence is common in cryptocurrency drawdowns. Selling often begins with risk reduction and accelerates as exchanges close positions in derivatives, regardless of conviction or “fundamentals.”
When liquidity is thin, forced flows can dominate pricing. Or, more simply, the tape can be made to appear to be reacting to hidden information, provided that the leverage is quickly and automatically shut down.
On-chain signals indicate realized losses and whale deposits
Meanwhile, blockchain data added a second layer to the story, showing that both perceived pain and potential supply are moving towards where it can be sold or hedged.
On February 4, Bitcoin’s entity-adjusted realized losses (7D-SMA) reached $889 million per day, the highest daily loss realized since November 2022, according to Glassnode data.
This type of printing typically appears when coins are selling at a large loss, and is consistent with capitulation dynamics during sharp drawdowns.
This is a reminder that the damage during a sell-off is not only caused by major price movements, but also by the amount of holders locking in losses when the market trades above levels that previously served as psychological support.
Meanwhile, CryptoQuant data showed whale behavior on Binance during the plummet.
According to the company, the foreign exchange whale ratio (30-day SMA) jumped to 0.447, the highest level since March 2025.
An increase in the whale ratio indicates that the largest inflows are an unusually large proportion of deposits, a pattern often seen when whales are preparing to sell, hedge, or reposition.
Additional CryptoQuant data quantified the size of these deposits. In early February, Binance reported that total Bitcoin inflows were approximately 78,500 BTC, and whale inflows were approximately 38,100 BTC, suggesting that whales accounted for approximately 48.5% of deposits.
Please note that the above data does not guarantee immediate sale. Large deposits may also be made in advance of derivative hedging, collateral movement, or internal treasury restructuring.
However, given the rapid price decline and liquidation cascade situation, this supports the idea that major players were active on the supply side as liquidity declined. With markets already fragile, even the possibility of supply heading to exchanges could weigh on sentiment.
Additionally, Santiment’s data also framed this move as a distribution event among large holders.
According to Santiment, wallets holding between 10 and 10,000 BTC experienced a net decline of 81,068 BTC in eight days, dropping to a 9-month low of 68.04% of total supply, while “Ebi” wallets holding less than 0.01 BTC rose to 0.249% of supply, a 20-month high.
Overall, the on-chain situation is consistent with what the tape showed. Large holders were aggressive, loss disposals skyrocketed, and small buyers were not enough to prevent air pockets after leverage began to loosen.
Retail accumulation can slow declines in margins, but it rarely overwhelms markets driven by leverage resets and large holder positioning.
Tight liquidity due to macro risk-off and cross-asset deleveraging
The last part of the explanation is macro, as Bitcoin is increasingly traded as a liquidity-sensitive risk asset during periods of stress.
Reuters linked the unwinding of leveraged speculative positions across multiple assets, including cryptocurrencies, to the broader market mood as investors retreated from risk.
At the same time, there was a sharp decline in commodities including gold and silver during the same period, highlighting that the pressure was not limited to cryptocurrencies alone.
If both speculative assets and traditional “defensive” positions are sold, liquidity could quickly tighten, particularly if margin requirements increase and the Fund reduces its overall portfolio exposure.
US stocks also contributed to the risk-off trend. A Reuters report this week painted a picture of a tech-driven backlash as investors question the payback schedule for big spending on AI and debate whether its disruption could compress profit margins across software and data services.
Additionally, new labor market stress signals, such as the announcement of layoffs in January, the highest in 17 years, could influence a broader reassessment of growth and risk.
This is important for Bitcoin because macro-driven risk aversion tends to impact the most liquid and most reflexive markets first.
In this episode, price action fit that template. ETF outflows lowered marginal bid prices, falling spot prices triggered derivative liquidations, and on-chain data showed loss realizations and rising whale deposits amid volatility.
The result was a movement that looked like a “black swan” on the chart, but behaved like a liquidity event in the pipes.