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$2.65 Billion Liquidated in 24 Hours. Are Bears Near Capitulation?

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Crypto Market Total Liquidation. Source: CoinGlass

Trader losses intensified during the first week of February. Liquidation volume kept rising as the market repeatedly crushed recovery expectations, driven by consecutive red candles.

However, several analyses point to light at the end of the tunnel, even though a rapid recovery remains unlikely.

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Over $2.6 Billion Liquidated in 24 Hours Reflects Structural Market Weakness.

CoinGlass reported that total crypto market liquidations reached $2.65 billion over the past 24 hours. Long positions accounted for more than $2.2 billion of that total.

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“According to CoinGlass data, in the past 24 hours, 586,053 traders were liquidated, with total liquidations reaching $2.65 billion,” CoinGlass reported.

Crypto Market Total Liquidation. Source: CoinGlass
Crypto Market Total Liquidation. Source: CoinGlass

CoinGlass data also shows that the smallest event in the Top 10 Crypto Liquidation Events of All Time occurred recently on January 31, with $2.56 billion in liquidations. This suggests the ranking could soon be reshuffled.

The market analysis account, The Kobeissi Letter, explained that this move is not a short-term shock. It reflects a structural downturn that has been developing since October last year.

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The root causes include weak liquidity, negative sentiment, and cascading liquidation pressure across markets. The account emphasized that this is a recurring cycle: liquidations damage sentiment, and worsening sentiment triggers further liquidations.

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Bitcoin’s intraday price swings of up to $10,000 were attributed to sharply reduced market depth. The current Bitcoin market depth is only 30% of its October peak. This condition mirrors the post-FTX collapse environment seen in 2022.

Bitcoin Market Depth. Source: The Kobeissi Letter
Bitcoin Market Depth. Source: The Kobeissi Letter

A BeInCrypto report noted that ongoing panic selling has pushed many crypto treasuries toward rising bankruptcy risk. Bitcoin’s drop to $60,000 pushed MicroStrategy’s holdings below cost basis, increasing balance-sheet pressure.

Against this backdrop, veteran technical analyst Peter Brandt offered a forecast based on the “Bitcoin Power Law” model. He suggested that Bitcoin could trade within a “banana peel” range, with potential support near $42,000.

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Brandt argued that if Bitcoin enters this zone, similar to previous bear cycles, bullish investors are unlikely to remain below that level for an extended period.

Is a Major Opportunity Taking Shape?

Despite the bleak outlook, not all analysts remain pessimistic.

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Glassnode reported that Bitcoin’s capitulation index recorded its second-largest spike in the past two years. This signals a sharp rise in forced selling. The metric tracks supply held at different price levels and measures market stress to identify potential local bottoms.

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Such stress events often coincide with rapid de-risking and heightened volatility. Investors rebalance positions during these phases.

Bitcoin’s Capitulation Metric. Source: Glassnode
Bitcoin’s Capitulation Metric. Source: Glassnode

Large-scale liquidations also reduce overall market leverage. This process drives a shift away from leveraged speculation toward spot accumulation. “Weak hands” exit, making room for higher-conviction investors.

“Bitcoin deleveraging may create a strong opportunity soon,” economist Daniel Lacalle noted.

These observations suggest a buying opportunity may be forming. They do little, however, to pinpoint exactly when a recovery will begin.

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Crypto World

Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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