In the early hours of February 1, 2026, mainstream cryptocurrencies such as BTC and ETH suddenly lost key support levels in an environment of high leverage, with BTC briefly dipping to approximately $75,719.9 before quickly rebounding back to the previous range, triggering severe market turbulence. According to CoinGlass data, a total of approximately $2.367 billion was liquidated across the network within just 12 hours, with the liquidation direction predominantly favoring long positions, as high-leverage long orders were "reset." As the cost basis of institutions like MicroStrategy became the market focus and panic sentiment sharply escalated, this "liquidation night" resembled a concentrated clearing of high leverage rather than a fundamental reversal of long-term trends.

$2.367 Billion Liquidation and Sentiment Reversal

● Liquidation Rhythm: According to CoinGlass statistics, from the early morning to around noon on February 1, the total liquidation scale in the contract market reached $2.367 billion, with the peak of liquidations concentrated during the momentary plunge of mainstream assets like BTC and ETH. After prices briefly broke through key support, automatic reductions and passive liquidations compounded, accelerating a chain reaction of liquidations, presenting a typical high-leverage cascading structure.

● Long-Short Imbalance: In terms of liquidation structure, long positions accounted for approximately $2.22 billion, far exceeding short positions at about $147 million, indicating a severe imbalance between longs and shorts, highlighting the previous market's excessive bullish bets. Once prices began to decline sharply, a large number of high-leverage long positions exited in a very short time, further hollowing out an already fragile order book.

● Key Price Levels: Market records show that BTC briefly fell to around $75,719.9 during this decline, temporarily breaking through a price range previously regarded as significant support. The momentary loss of technical support, combined with forced liquidations of high leverage, amplified the typical waterfall pattern of "fast declines and quick rebounds."

● Sentiment Plunge: Alongside the price changes, there was a sharp reversal in investor sentiment. The Fear and Greed Index dropped to 14 after the event, entering the "extreme fear" zone, indicating that short-term sentiment shifted rapidly from previous optimism, even bordering on greed, to a risk-averse state, with funds more inclined to reduce positions and observe rather than chase higher prices.

Psychological Impact of Breaching Institutional Cost Lines

● Psychological Anchor: In market narratives, MicroStrategy's BTC holding cost is widely regarded as an important "institutional cost line," currently estimated to be around $76,037. This price is used by many traders as an anchor point for sentiment and expectations; a drop below this range inherently amplifies market associations of "potential losses for institutions."

● Imagined Losses: When BTC's price fell below the $76,037 line during the flash crash, some market participants interpreted it as a signal of expanding unrealized losses for MicroStrategy, leading to scenarios of "institutions possibly being forced to reduce positions," which amplified panic selling. Although this interpretation lacks direct evidence, in a high-leverage environment, it was sufficient to trigger a herd effect and further downward pressure.

● Topic Weight: Public information shows that MicroStrategy holds approximately 712,647 BTC, with a total cost of about $54.19 billion. From both an absolute scale and market narrative perspective, its holdings carry significant symbolic meaning, and thus its "cost line" has been repeatedly referenced, becoming a key narrative pivot in the tug-of-war between bulls and bears in this round of market activity.

● Data Boundaries: It is important to emphasize that the $76,037 cost price is essentially an approximate estimate, and the specific calculation methods and details of each position have not been fully verified, making it inappropriate to interpret it with excessive precision. Viewing this price as the "only and precise" line of life and death for institutions carries the risk of amplifying emotional volatility and being exploited in narratives.

Capital Layering of Whales Acting Against the Trend

● Contrarian Large Orders: According to a single source, during this sharp decline, the mysterious buyer "7 Siblings" address bought 12,806 ETH against the trend, choosing to significantly increase their position at a time when panic sentiment dominated the market, representing a typical behavior of "killing the long positions while accumulating against the trend." This action sharply contrasts with retail investors who were cutting losses.

● Continuous Support: On-chain data shows that after completing a phase of buying, this address still retains open orders, indicating an intention to further accumulate during ongoing price fluctuations. Compared to short-term speculation, high-volume addresses are more inclined to use extreme volatility to average down costs rather than being driven out by short-term panic.

● Capital Layering: On one side, the fear index dropped to 14, with many high-leverage longs being passively liquidated; on the other side, whale addresses were placing orders in batches to absorb chips, clearly reflecting capital layering: leveraged retail investors were forced to "hand over chips" during extreme emotions, while low-leverage, high-capital accounts utilized price mispricing for contrarian positioning.

● Information Boundaries: It should be noted that the specific identity and true motives of "7 Siblings" can currently only be inferred based on on-chain behavior, representing single-source information that cannot be equated with publicly disclosed institutional actions. Interpreting it as a consensus among certain institutions carries a clear risk of over-extrapolation and should be approached with caution.

Emotional Collapse of Trading Seats

● Frontline Mindset: On the emotional level, trader Eugene Ng Ah Sio stated that the recent long positions were "harvested" during the flash crash, choosing to temporarily withdraw from trading, directly reflecting the psychological state of some professional trading seats after the high-leverage cascade—shifting from offense to defense, prioritizing capital preservation over continued speculation.

● Leverage Amplification: According to BlockBeats reports, whale agent Garret Bullish had a liquidation scale exceeding $700 million on the same day, indicating that the leverage risk of a single account or capital entity was amplified to hundreds of millions through chain liquidations, demonstrating that in extreme market conditions, individual positions can also magnify overall liquidity and volatility.

● Liquidity Contraction: After concentrated liquidations of long positions, some funds that were originally actively participating in high-leverage trading chose to observe or temporarily exit, leading to a noticeable contraction in active liquidity supply in the derivatives market in the short term. A thinner order book means that any medium-sized trades in either direction are more likely to push prices, reinforcing volatility.

● Market-Wide Run on the Bank: From the combination of individual narratives and liquidation data, this flash crash was not triggered by a single issue from one or two institutions but rather a simultaneous price shock faced by high-leverage longs across the entire market, initiating a leverage run on the bank process of "whoever reduces positions first is saved, and whoever fails to reduce positions is liquidated."

Clearing and Differentiation Under Extreme Fear

● Bottom Structure in Panic: With the Fear and Greed Index dropping to 14, entering the extreme fear zone, historical experience shows that such readings often occur at phases of concentrated leverage clearing and excessive emotional compression, marking potential bottoms or bottom-building areas. While it does not represent an immediate reversal, it often indicates that the most extreme round of emotional release has already occurred.

● Cost Line Defense: BTC briefly fell below the $76,037 line during the sharp decline but quickly recovered and oscillated near the cost area, indicating that while bears quickly "smashed through" support using emotional and leverage advantages, there were also funds beginning to enter in batches near key price levels, leading to a tug-of-war around the institutional cost line.

● Variety Differences: Structurally, ETH showed signs of active buying under the counter-trend accumulation by large addresses like "7 Siblings"; whereas in the case of BTC, passive liquidations predominated, with the main factor being the forced reduction of high-leverage longs. This difference between varieties reflects that the capital structure and participant profiles of different tokens are not the same.

● Essential Attribution: Considering the scale of liquidations, sentiment indicators, and on-chain behavior, this round of flash crash appears more like a severe reshuffling caused by concentrated liquidations of high-leverage longs rather than stemming from fundamental deterioration or a collapse of long-term narratives. Behind the dramatic price fluctuations lies an adjustment of leverage and sentiment structures, rather than a complete overhaul of the logic of the entire asset class.

The Battlefield After Liquidation and Survival Thresholds

● Double-Edged Sword of Institutional Narratives: This flash crash exposed the market's excessive reliance on a single institutional cost line and high-leverage structure—the simplification of MicroStrategy's holding cost to an "absolute bottom line" emotionally anchors prices to a single number, so that once breached, it amplifies panic and cascading effects, becoming a resonant amplifier of market volatility.

● Matthew Effect of Capital: When whale addresses buy against the trend in extreme panic, while retail and high-leverage traders are passively liquidated and stop-loss out, capital differentiation and the Matthew effect are further reinforced. Those who can continuously survive and accumulate against the trend during volatility are often low-leverage, long-duration funds; while accounts chasing short-term high leverage are more likely to be cleared in extreme market conditions.

● Narrative Utilization Risks: Future market participants need to be wary of narratives like "institutional cost lines" being repeatedly exploited. Whether bullish or bearish, both sides may engage in public opinion and trading battles around a price point that is collectively focused on, using the public's emotional dependence on single data points to amplify volatility and create new "scripts."

● Strategic Shift: In an environment of high-leverage clearing and extreme emotional swings, investors need to shift from chasing high leverage to systematically managing risk exposure and extreme volatility plans—reducing leverage multiples, reasonably setting margin and stop-loss ranges, and reserving sufficient liquidity to cope with "instant waterfalls," to have a chance to survive the next similar liquidation night.

Join our community to discuss and grow stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh

OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。