Bitcoin experienced a severe market correction on February 5, 2026, with its price dropping below $67,000 and triggering massive liquidations exceeding $1.4 billion across the cryptocurrency market. The sell-off pushed Bitcoin down over 20% for the week, with the $65,000 level emerging as a critical support zone that traders are closely monitoring.
The liquidation event was particularly brutal in a four-hour window, where data from CoinGlass revealed an extreme imbalance. During this period, over $118.63 million in long positions were force-liquidated compared to just $4.53 million in shorts, representing a staggering 2,618% imbalance. This short-term "death spiral" contributed to a total four-hour liquidation count of $123.17 million, exposing what analysts described as a "leveraged market in denial" where bullish conviction had detached from execution risk.
Over a 24-hour period, the situation remained dire with $466.32 million in long liquidations out of a total $527.99 million—over 88% of all liquidations. Bitcoin alone accounted for more than $700 million of the broader market's $1.4 billion liquidation total, with long positions bearing the brunt at approximately $1.24 billion.
Technical indicators suggest the market has entered extremely oversold territory, with momentum indicators stretched after weeks of persistent selling and failed recovery attempts. Bitcoin's decline to around $67,500 represented a nearly 4% daily drop, with the cryptocurrency briefly touching $69,000—a crucial psychological level corresponding to its 2021 all-time high—before the flush occurred.
The sell-off has spilled aggressively into altcoins, which are posting larger weekly declines as risk appetite collapses. Ethereum is trading near $1,960, down about 5.7% daily and nearly 30% weekly. Solana has fallen to around $85.50 with similar losses, while XRP hovers near $1.29 after dropping about 5.4% on the day. BNB is trading around $656, down roughly 24% on the week. Across these major altcoins, RSI readings indicate extreme oversold conditions, pointing to panic selling and leverage unwinds rather than fundamental shifts alone.
Market analysts note that funding rates remained elevated on platforms like Binance and Bybit even during the sell-off, suggesting bulls had not adequately de-risked. The current environment raises concerns about a potential deeper de-risking cycle that could take Bitcoin below current psychological zones, with some analysts pointing to the $40,000 to $50,000 range as a possible magnet if the $65,000 support fails to hold.
