Crypto Futures Liquidations Hit $520M as Longs Dominate Amid Extreme Fear

VADODARA, February 5, 2026 — The cryptocurrency market witnessed over $520 million in futures liquidations across major assets in the past 24 hours, with long positions accounting for the overwhelming majority, according to data from Coinness. This daily crypto analysis reveals a stark imbalance in leveraged bets, as Bitcoin ($270 million liquidated, 83.69% longs), Ethereum ($180 million liquidated, 66.33% longs), and Solana ($70.52 million liquidated, 93.06% longs) faced significant selling pressure. Market structure suggests a classic liquidity grab, where overleveraged longs are being flushed out amid extreme fear sentiment, potentially setting the stage for a technical rebound or further downside.

Investigation: The Liquidation Cascade and Market Mechanics

According to the primary data from Coinness, the 24-hour liquidation volumes highlight a concentrated unwind in perpetual futures contracts. Bitcoin led with $270 million, where 83.69% of liquidated positions were longs, indicating that bullish traders faced margin calls as prices declined. Ethereum followed with $180 million in liquidations, with 66.33% longs, while Solana saw $70.52 million liquidated, dominated by longs at 93.06%. These figures point to a systemic risk in overleveraged long exposure, exacerbated by high funding rates and crowded trades. The liquidation process typically triggers cascading sell-offs, as forced closures add downward momentum, creating a feedback loop that amplifies volatility.

Consequently, this event mirrors past capitulation phases, such as the May 2021 sell-off, where similar liquidation spikes preceded market bottoms. Underlying this trend is the role of centralized exchanges' risk engines, which automatically close positions when collateral falls below maintenance margins. For a deeper understanding of market mechanics, traders often refer to resources like Ethereum's official documentation on decentralized finance risks, which outlines how leverage can destabilize markets. The high percentage of long liquidations, especially in Solana, suggests retail speculation outpaced institutional hedging, a common precursor to sharp corrections.

Market Context & Historical Precedent

Historically, liquidation events of this magnitude correlate with extreme fear sentiment and often mark local bottoms or acceleration points in trends. In contrast to the 2021 bull run, where liquidations were more balanced, the current dominance of longs indicates a speculative froth that is now being unwound. This aligns with broader market conditions, such as the recent Bitcoin price drop below $72,000, driven by macroeconomic uncertainties and regulatory overhangs. , the extreme fear reading on the Crypto Fear & Greed Index (12/100) echoes the March 2020 crash, when similar scores preceded a V-shaped recovery.

Related developments include whale dumping of $140M in ETH and SOL at a loss, which compounds selling pressure, and shifts in venture capital sentiment toward blockchain utility. These factors create a complex backdrop where technical liquidations intersect with fundamental doubts. Market analysts note that such events often reset leverage ratios, reducing systemic risk and paving the way for healthier uptrends, provided key support levels hold.

Technical Architecture & Price Action

Technical analysis reveals critical levels that define the current market structure. Bitcoin's price action shows a breakdown below the $72,000 support, now testing the $70,000 psychological zone and the 200-day moving average near $68,500. The Relative Strength Index (RSI) on daily charts is approaching oversold territory (below 30), suggesting potential for a bounce if buying interest emerges. However, the high volume of liquidations indicates weak hands are exiting, which could form a Fair Value Gap (FVG) if prices rebound sharply. For Ethereum, key support lies at the $3,500 level, with resistance at $3,800, while Solana faces a test at $140, its 50-week moving average.

Market structure suggests that these liquidations have created order blocks—areas where large positions were liquidated—that may act as future resistance or support. For instance, the Bitcoin liquidation cluster around $71,500 could become a supply zone if prices attempt to recover. Additionally, the dominance of long liquidations in Solana (93.06%) points to a gamma squeeze scenario, where options-related hedging exacerbated the move. Traders monitor UTXO age bands to assess holder behavior, with recent spikes in young UTXOs indicating panic selling. This technical setup the importance of invalidation levels to confirm trend shifts.

By The Numbers

Why It Matters

This liquidation event matters because it reflects the health of market leverage and sentiment, directly impacting liquidity cycles. Institutional players, such as hedge funds and ETFs, monitor these metrics to adjust risk exposure, as high liquidations can trigger broader deleveraging across correlated assets. For retail traders, the dominance of long liquidations serves as a warning against overleveraging in frothy conditions. Real-world evidence includes reduced open interest in futures markets post-liquidations, which often precedes periods of consolidation or trend reversal. , such events highlight the fragility of perpetual futures funding models, where positive funding rates attract longs until a sudden reversal sparks cascades.

Underlying this trend is the interplay between on-chain data and derivatives activity. Glassnode liquidity maps indicate that liquidations tend to cluster around key technical levels, exacerbating price moves. Consequently, this event could reset market structure, making it easier for new capital to enter at lower valuations. In the context of the 5-year horizon, periodic liquidations are necessary to purge excess speculation, supporting sustainable growth. However, if support levels fail, it may signal a deeper correction akin to the 2018 bear market, where leverage unwinds prolonged downtrends.

Expert Commentary

"The asymmetry in long liquidations, particularly for Solana at 93%, indicates a retail-driven speculative bubble that is now deflating. Market structure suggests we are witnessing a liquidity grab, where weak hands are being washed out to set a higher low. However, until Bitcoin reclaims the $72,000 level, the bias remains skewed to the downside. Historical cycles show that such events often precede rallies, but only if the bearish invalidation level holds." — CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Based on current market structure, two data-backed technical scenarios emerge. The bullish scenario involves a rebound from key support levels, fueled by short covering and renewed institutional buying, potentially targeting Bitcoin's resistance at $75,000. The bearish scenario envisions a breakdown below critical supports, leading to further liquidations and a test of lower Fibonacci retracement levels, such as the 0.618 level near $65,000 for Bitcoin.

• Bullish Invalidation Level: Bitcoin at $72,000. A break above this resistance would confirm a trend reversal, invalidating the current bearish structure and signaling that liquidation pressure has subsided.
• Bearish Invalidation Level: Bitcoin at $68,500 (200-day MA). A breach below this support would indicate sustained selling momentum, likely triggering additional liquidations and extending the correction toward $65,000.

For the 12-month institutional outlook, this event may enhance market health by reducing systemic leverage, aligning with long-term growth narratives like Ethereum's Pectra upgrade or Bitcoin's adoption cycles. However, if fear persists, it could delay capital inflows, emphasizing the need for robust risk management. Analysts suggest monitoring volume profile shifts and on-chain holder behavior to gauge conviction.