Crypto market in 'capitulation mode' as bitcoin falls 17% in a week

Bitcoin plummets as crypto market sentiment weakens, with $2 trillion lost since October 2024.

Feb. 5, 2026 at 8:15pm

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Bitcoin plunged on Thursday, with its decline accelerating amid weakening risk sentiment driven in part by volatility in precious metals and a broad selloff in tech shares. The world's largest cryptocurrency fell to a low of $63,295.74, its weakest level since October 2024. Roughly $1 billion in bitcoin positions have been liquidated in the past 24 hours, and the global crypto market has lost $2 trillion in value since hitting a peak of $4.379 trillion in early October.

Why it matters

The latest crypto tumble has knocked down shares of companies holding bitcoin and other digital assets, stoking worries that the market turmoil is spreading beyond token prices. Cryptocurrencies have widely been regarded as beneficiaries of a large Federal Reserve balance sheet, and the market fears that the potential selection of Kevin Warsh, seen as a 'hawk', to become the next Fed chair could lead to a shrinking of the central bank's balance sheet, removing a key support for speculative assets like crypto.

The details

Bitcoin has already fallen 17% for the week, taking its losses for the year so far to 28%. Ether, the second-largest cryptocurrency in terms of market capitalization, was down more than 13% at $1,854 late on Thursday, with losses of nearly 38% so far this year. Sentiment on crypto was affected by the latest selling in metals and stocks, with gold and silver becoming more volatile due to leveraged buying and speculative flows. The S&P 500 sank to a seven-week low, while the Nasdaq slid to its lowest in more than two months, as the AI theme came under renewed pressure.

  • Bitcoin fell to a low of $63,295.74 on Thursday, its weakest level since October 2024.
  • Roughly $1 billion in bitcoin positions have been liquidated in the past 24 hours.
  • The global crypto market has lost $2 trillion in value since hitting a peak of $4.379 trillion in early October.

The players

Nic Puckrin

Investment analyst and co-founder of Coin Bureau.

Manuel Villegas Franceschi

From the next generation research team at Julius Baer.

Mohit Kumar

Jefferies strategist.

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What they’re saying

“It's clear the crypto market is now in full capitulation mode. If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition from distribution to reset – and these typically take months, not weeks.”

— Nic Puckrin, Investment analyst and co-founder of Coin Bureau (wishtv.com)

“The market fears a hawk with him. A smaller balance sheet is not going to provide any tailwinds for crypto.”

— Manuel Villegas Franceschi, From the next generation research team at Julius Baer (wishtv.com)

“Concerns are being raised around the crypto miners and whether we could be looking at forced liquidations if prices continue to fall, which could lead to a vicious cycle. Our view on crypto has always been that it should be never more than a very small portion of the overall portfolio. However, it is also an asset class that is heavily owned, particularly by retail investors, and hence adds to the overall market risk.”

— Mohit Kumar, Jefferies strategist (wishtv.com)

What’s next

The market will be closely watching to see if the Federal Reserve's selection of a new chair, potentially Kevin Warsh, will lead to a shrinking of the central bank's balance sheet, which could further weigh on the crypto market.

The takeaway

The crypto market is in a state of 'capitulation', with billions in losses and growing concerns about the impact on crypto miners and retail investors. This downturn highlights the volatility and risk inherent in the crypto market, and the need for investors to carefully consider their exposure to digital assets as part of a diversified portfolio.