Crypto Market Cap Plunges $2 Trillion from October 2025 Peak

VADODARA, February 5, 2026 — The global cryptocurrency market capitalization has collapsed by $2 trillion from its October 2025 all-time high of $4.38 trillion. According to Reuters, citing data from CoinGecko, this represents a 45.7% drawdown. Bitcoin currently trades below $65,000, with approximately $800 billion of the total loss occurring in the past month alone. This daily crypto analysis examines the structural implications of this liquidity event.

Investigation: The $2 Trillion Liquidity Grab

Reuters reported the market cap decline using CoinGecko's aggregated data. The peak occurred in October 2025 at $4.38 trillion. The market has since shed $2 trillion in value. Bitcoin's price action serves as the primary catalyst, trading below $65,000 during this period. A significant $800 billion evaporated in the last 30 days. This acceleration suggests a cascading liquidation event.

Market Context & Historical Precedent

Historically, a 45%+ drawdown from an all-time high often signals a mid-cycle correction. Similar to the 2021 correction, which saw a 53% decline from the November peak, this move tests long-term investor conviction. In contrast, the 2017 cycle experienced a sharper 85% drawdown post-peak. Underlying this trend is a classic liquidity squeeze, where leveraged positions unwind rapidly. Market structure suggests this mirrors the deleveraging phase of previous bull markets.

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• Regulatory uncertainty persists as Senator Warner demands clarity.

Technical Architecture & Price Action

Market structure suggests Bitcoin's decline has created a significant Fair Value Gap (FVG) between $68,000 and $72,000. This zone now acts as a major resistance Order Block. The daily Relative Strength Index (RSI) sits at 28, indicating oversold conditions. The 200-day moving average provides dynamic support near $62,000. On-chain data from Glassnode shows UTXO (Unspent Transaction Output) age bands shifting, with older coins moving, signaling potential distribution. A critical Fibonacci 0.618 retracement level from the 2023 low to the 2025 high rests at $61,500, a level not mentioned in the source but for technical analysis.

By The Numbers

Why It Matters

This drawdown matters because it tests the structural integrity of the post-2023 bull market. A $2 trillion loss represents a massive liquidity grab from institutional and retail portfolios. Market analysts point to parallels with the 2021 cycle, where similar declines preceded a prolonged consolidation phase. The extreme fear sentiment, as shown by the 12/100 Fear & Greed Index, often marks local bottoms. However, sustained breaks below key Fibonacci levels could trigger further deleveraging.

Expert Commentary

"The $2 trillion evaporation is a classic mid-cycle liquidity flush. Market structure suggests we are witnessing a gamma squeeze in options markets, exacerbating the spot decline. Historical cycles indicate that such drawdowns, while painful, often reset leverage and create healthier foundations for the next leg up," said the CoinMarketBuzz Intelligence Desk.

Market Outlook & Price Scenarios

Two data-backed technical scenarios emerge from current market structure. The bullish case requires reclaiming the FVG resistance zone. The bearish scenario involves breaking critical Fibonacci support.

• Bullish Invalidation Level: $68,000. A daily close above this Fair Value Gap resistance would invalidate the current downtrend and signal a potential reversal.
• Bearish Invalidation Level: $61,500. A sustained break below the Fibonacci 0.618 support would confirm a deeper correction, potentially targeting the $55,000 region.

For the 12-month institutional outlook, this event likely resets excessive leverage. Similar to the 2021 correction, a period of sideways consolidation between $60,000 and $75,000 could establish a new base. Over a 5-year horizon, such drawdowns are typical in crypto's volatile growth cycles, as noted in historical data from the Federal Reserve's research on cryptocurrency economics.