Crypto Liquidations Surge $2.56B as Bitcoin Slumps – Jan 2026

Crypto markets sold off sharply into Feb. 2, 2026, with Bitcoin hitting a $74,553 intraday low and Ethereum trading around $2,269 as leveraged longs got forced out across major derivatives venues. The slide followed a record liquidation burst on Jan. 31, when $2.5615 billion was wiped out in 24 hours, reinforcing a risk-off tone spilling from majors into large-cap altcoins.

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Context

Leverage was elevated heading into the move, increasing the odds of a liquidation cascade once BTC broke key support zones. In late January, Binance’s Bitcoin leverage ratio hit 0.182, the highest level in roughly two months, underscoring how sensitive positioning had become to downside volatility.​

Macro headlines also mattered. On Jan. 30, 2026, President Donald Trump nominated Kevin Warsh to replace Jerome Powell as Federal Reserve chair, a shift that pushed markets toward tighter-policy expectations and added pressure to risk assets, including crypto.

Details

On Feb. 2, Bitcoin fell to $74,553 during trading, its lowest level since early April 2025, before rebounding toward the high-$76,000s to $77,000 area. Ethereum traded at $2,269.33, after a prior-day range that included a dip to $2,166.

The first major liquidation wave hit on Jan. 31, when total liquidations reached $2.5615 billion over 24 hours. Longs accounted for $2.4068 billion (94%) while shorts totaled $154.7 million (6%), based on reports citing Coinglass data.

A second wave followed on Feb. 1, with about $2.2 billion liquidated and more than 335,000 traders forced out, showing how quickly leverage can rebuild even after an initial flush. In that Feb. 1 event, Ethereum-linked liquidations were reported at $961 million, highlighting ETH’s leverage sensitivity during fast downside moves.​

Impact

The damage spread beyond BTC and ETH. During the same window, large-cap alts fell in tandem, with Monero down 12%, Chainlink down 5.5%, and XRP down 4.5% in a broad de-risking move.​

Sentiment also deteriorated sharply. The Crypto Fear & Greed Index printed 14 out of 100 – “Extreme Fear” – as traders priced in more volatility and positioned defensively.

Flows remained a key headwind. Yahoo Finance reported that spot Bitcoin ETFs saw about $6 billion in net outflows over the prior three months ending January 2026, suggesting traditional wrappers continued to act as a source of supply rather than fresh demand.​

“Bitcoin is experiencing sustained selling pressure due to a lack of fresh capital inflows. This will lead to a prolonged period of sideways consolidation rather than a sharp price crash.” – Ki Young Ju, CEO, CryptoQuant, Feb. 2, 2026.​

Next Steps

Market participants are now watching whether leverage resets enough to slow forced selling. Late-January metrics pointed to heightened leverage in both BTC and ETH derivatives, which can accelerate moves in either direction once liquidation thresholds trigger.

Traders are also tracking whether ETF flows stabilize, because sustained outflows can cap rebounds even if spot selling pressure eases. At the same time, risk appetite will likely remain tied to U.S. monetary-policy expectations as the Warsh nomination moves through the political process and markets reprice the rate path.

“Signs of a bottom in January are also observed in other crypto indicators related to perpetual futures and positions on the Chicago Mercantile Exchange.” – JPMorgan analysts, Jan. 7, 2026.​

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P.S. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and make independent decisions.