The ongoing crypto bloodbath as of early February 2026 has turned into one of the more painful drawdowns in recent memory. Bitcoin is currently trading in the sixty-two thousand to sixty-four thousand dollar range after dipping briefly below sixty-one thousand earlier today. This puts it down roughly fifty percent from its all-time high near one hundred twenty-six thousand in October 2025. The total crypto market cap has fallen to around two point two to two point three five trillion dollars, losing about two trillion from its peak of roughly four point three to four point four trillion last year.
Ethereum and most major altcoins are down even harder in percentage terms over the past few weeks, with daily and weekly drops frequently in the double digits to low twenties. Liquidations continue to be massive, with billions of dollars in leveraged long positions getting wiped out in cascades almost every few days.
The main drivers right now are a combination of hawkish macroeconomic signals, especially the nomination of Kevin Warsh as the next Fed Chair which sparked fears of tighter policy and fewer rate cuts. This has caused risk assets including crypto and tech stocks to sell off sharply. Dollar strength, higher real yields, and liquidity drains from Treasury activity have added pressure. Crypto is acting like a highly leveraged version of growth stocks in this risk-off environment.
On top of that, heavy leverage built up during the 2025 rally is now unwinding violently. Margin calls and stop-loss triggers create self-reinforcing downward spirals. Institutional flows have flipped negative with consistent outflows from spot Bitcoin ETFs. Confidence in Bitcoin as a safe-haven asset has faded because it has not held up during this period of uncertainty.
Profit-taking from long-term holders who bought much lower and some distribution from over-leveraged players are also contributing. The mood is extreme fear, with retail capitulation visible as smaller holders sell heavily.
Regarding whales dumping versus a correction: it is mostly a deep structural correction and bear-market reset rather than pure coordinated whale manipulation. Some large players and institutions have sold chunks, which adds to the downward pressure, especially in thin liquidity. However, on-chain behavior shows many of the biggest holders quietly accumulating during these dips while retail panic-sells. This is the classic pattern seen at previous cycle lows where smart money absorbs supply from shaken-out hands.
Overall this looks like the flush of excess speculation and leverage after a strong bull run, triggered and prolonged by unfavorable macro conditions. It shares similarities with the 2022 crypto winter in terms of duration, psychology, and deleveraging mechanics. While bottoms often form after heavy capitulation, more downside toward fifty-five to sixty thousand or lower for Bitcoin is still possible if the macro picture stays hostile.
Risk management is critical in this environment. No over-leveraging, and always do your own research. This is a high-conviction fear phase right now.
