Top 5 Reasons Why BTC Price Is Crashing Non-Stop Right Now

BTC price fell to $60,000 amid high volatility and uncertainty, extending the ongoing crash from the October peak and erasing $1.2 trillion in market value. Bitcoin has entered a “full capitulation mode” after a more than 30% decline in a week. Here are the top 5 factors driving Bitcoin’s non-stop crash.

BTC Price Crash as Whales and Shark Wallets Dump Holdings

Whale and shark wallets holding 10 to 10,000 BTC now hold 68.04% of the entire Bitcoin supply, a 9-month low. They dumped 81,068 BTC in just the past 8 days alone, according to Santiment.

Meanwhile, shrimp wallets holding less than 0.01 BTC are buying the dips, holding a 20-month high of 0.249% of the entire Bitcoin supply. This combination has historically created bear cycles.

Whale and Shark Wallets Dump BTC. Source: Santiment

What global markets saw in the last 24 hours was a “death spiral,” severely impacting Bitcoin treasury companies, gold, silver, and the broader financial markets.

Lookonchain reported that Bitcoin mining firm Marathon Digital also transferred 1,318 BTC worth $86.89 million to crypto exchanges. MARA and RIOT Stocks are likely to offload millions in BTC as their stocks fell 14-18%.

Bitcoin Options Expiry

Crypto traders brace for intense volatility and downturn as more than 32K BTC options to expire on crypto derivatives exchange Deribit on February 6. Notably, $2.1 billion in notional value expires today, with a put-call ratio of 0.53.

However, put volume has surpassed call volume, with a massively bearish put/call ratio of 1.40. The BTC implied volatility severely crashed from 90 to 69 in just a few hours. Moreover, the max pain price is $80,000.

BTC Implied Volatility

Crypto traders anticipate that BTC will consolidate between $65K and $70K until further signals from macroeconomic factors, ETF activity, and overall market sentiment.

Deribit said, “With protection demand already increasing and volatility repriced, this expiry could act as a short term reset in dealer hedging flows. Expiry may remove positioning-related gravity around big strikes.”

Bitcoin Options Expiry. Source: Deribit

Crypto Market Crash as $2.6B Liquidations Hit BTC, ETH, XRP, BNB, SOL

The crypto market bloodbath has worsened amid panic selloffs. Coinglass data shows more than $2.60 billion erased from top crypto assets in the past 24 hours. Bitcoin recorded $1.35 billion in total liquidations, with $1.10 billion in long positions.

Huge 580K traders were liquidated in the past 24 hours, with the largest single liquidated order of BTCUSDT worth $12.02 million on Binance. The crypto market saw multiple $500 million in liquidations every few hours, causing BTC price to crash towards $60,000.

BTC, ETH, SOL, XRP, HYPE, DOGE, XAG, BNB, ZEC, SILVER perpetual, and ADA were among the most liquidated assets in the past 24 hours.

Crypto Liquidations. Source: Coinglass

Silver and gold prices also tumbled on Thursday, partly due to the broader crypto crash. “Big Short” investor Michael Burry explained that institutions and corporate treasuries book profits in tokenized gold and silver futures to cover crypto-related margin calls and losses.

Massive ETF Outflows Drain Market Liquidity

The reversal in institutional demand through spot Bitcoin ETFs represents one of the most significant structural shifts amid the crash. The exchange-traded funds are net sellers, with almost 1.2 billion in net outflows in the last 3 trading days.

Spot Bitcoin ETFs saw another $434.16 million in two-day outflows, pushing prices further below the ETF cost basis. BlackRock’s IBIT led with $175.3 million in outflows. Fidelity, Grayscale, Bitwise, and Ark 21Shares also recorded redemptions, triggering a deeper crash in BTC price.

Spot Bitcoin ETF Outflow. Source: SoSoValue

As CoinGape reported, BlackRock Bitcoin ETF (IBIT) recorded a new high with over 284 million shares changing hands. It is equal to a notional value of over $10 billion in volume.

To put it in perspective, this volume blew the old record of 169.21 million shares traded on November 21 by 169%. This happened after the decline in the IBIT shares, which fell by 13%. This share price closed below $35 for the first time since October 2024, down 27% this year.

Bloomberg analyst Eric Balchunas has again quoted, in a new X post, the brutal new record volume for the BlackRock Bitcoin ETF. “IBIT just crushed its daily volume record with $10b worth of shares traded as its price fell 13%, second worst daily price drop since it launched. Brutal,” he said.

Tech Stock Driven Rout and Macro Factors

A tech-driven pullback stretched into a third session, as fresh AI investments by companies raised concerns among investors. On Thursday, the S&P 500 and Nasdaq Composite fell 1.23% and 1.59%, respectively, marking a third consecutive session of losses.

Notably, Amazon shares tumbled over 10% as the company plans to ramp up capital spending to about $200 billion this year, with most funds directed toward AI projects and infrastructure.

Chipmakers also came under pressure after Qualcomm sank 8.5% on a cautious outlook tied to lower memory demand and inventory headwinds. Software stocks also extended declines amid growing risks over rising AI investments.

Moreover, the markets continue reacting aggressively to President Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, who is perceived as a hawk who favors tighter monetary policy and has triggered a BTC price crash.

In addition, Treasury Secretary Scott Bessent said this week that the U.S. government does not have the power to step in and bailout Bitcoin amid ongoing crash. This led to a decrease in institutional interest in crypto despite the Trump administration’s pro-crypto stance.

Source: https://coingape.com/top-5-reasons-why-btc-price-is-crashing-non-stop-right-now/