The crypto market is in full meltdown mode right now, and if you’re wondering what the heck is going on — you’re not alone. Bitcoin has dropped from above $80,000 to the low $60,000s, altcoins are getting absolutely wrecked, and the total crypto market cap has shed hundreds of billions. In this video, I break down exactly what’s driving this crash and what it means for the market going forward.
The Crypto Crash Reason Everyone’s Talking About
Let me be real with you — there isn’t just one crypto crash reason behind this dump. It’s a perfect storm of multiple factors hitting the market at the same time. But if I had to point to the single biggest catalyst, it’s leverage unwinding. According to Reuters, over $2.56 billion in leveraged crypto positions were liquidated in just a matter of days. That’s an insane amount of forced selling hitting the market all at once.
What happens is pretty straightforward: traders borrow money to make bigger bets on crypto going up. When the price starts dropping, their positions get automatically closed out — which dumps even more crypto onto the market, pushing prices lower, which triggers more liquidations. It’s a vicious cycle, and once it starts, it feeds on itself until the leverage is flushed out.
Bitcoin ETF Outflows Are Making Things Worse
Here’s something that wasn’t a factor in previous bear markets: Bitcoin ETF outflows. According to data from CoinShares, Bitcoin ETFs have seen consistent net outflows over several weeks, with institutional investors pulling out roughly $1.7 billion. That’s a massive reversal from the euphoric inflows we saw when these ETFs first launched.
When institutions redeem their ETF shares, the fund managers have to sell actual Bitcoin on the open market. So these outflows translate directly into real selling pressure. It’s not just paper losses — it’s actual coins being dumped. And when the biggest players in the room are heading for the exits, retail investors tend to panic and follow.
The October 2025 Crash Still Haunts This Market
To really understand why we’re here, you have to look back to October 10, 2025. That was the day everything changed. As US Funds reported, over $19 billion in leveraged positions were wiped out in hours, and Bitcoin plummeted from roughly $122,000 to $105,000. That single event broke the market’s structure.
Since then, Bitcoin has been in a sustained downtrend. October, November, December 2025, and January 2026 all closed in the red — that’s the longest monthly losing streak since the 2018 bear market. According to CryptoSlate, if February also closes red, it would mark Bitcoin’s most prolonged bearish period in history.
Macro Conditions Are Not Helping
The broader economic picture isn’t doing crypto any favors either. The Federal Reserve’s hawkish stance on monetary policy means less liquidity flowing into speculative assets. As one analyst from Julius Baer put it to Reuters: “A smaller balance sheet is not going to provide any tailwinds for crypto.”
Geopolitical tensions are adding fuel to the fire as well. When there’s uncertainty in global markets, investors tend to move away from risk assets — and crypto is still very much in that category. The combination of tighter monetary policy, geopolitical risk, and weakening stock markets has created an environment where crypto simply can’t catch a bid.
Fear Has Taken Over
The sentiment indicators are deep in “extreme fear” territory right now. And I get it — watching your portfolio bleed day after day is brutal. According to a Coin360 analysis, retail participation has dropped sharply since mid-2025, with Deutsche Bank research showing that crypto usage among US consumers has fallen significantly.
The New York Times has even called this slide “one of the worst crises in the crypto industry since 2022.” And The Atlantic published a piece noting that Bitcoin “has come to feel less like a rebel upstart, more like an eccentric uncle.” Ouch. When mainstream media starts writing crypto obituaries, you know sentiment is at rock bottom.
How Bad Could It Get?
Let’s talk worst-case scenarios, because I know that’s what everyone wants to know. Some strategists are warning that if this develops into a full-scale crypto winter, Bitcoin could decline toward $31,000 — representing a potential 70-75% peak-to-trough drop, according to CCN. That would mirror the severity of the 2022 bear market.
On-chain metrics from BeInCrypto suggest that capital rotation remains weak, and the current pattern resembles early bear market transitions we’ve seen historically. However, most reputable analysts still see Bitcoin holding above $55,000 even in harsh scenarios.
But It’s Not All Doom and Gloom
Here’s the thing I want to emphasize: nothing is fundamentally broken with crypto. Bitcoin’s blockchain didn’t fail. There was no security breach. Mining continues normally. Transactions are settling as expected. This is a market-driven crash, not a technological one.
The underlying technology hasn’t changed. The use cases haven’t disappeared. What we’re seeing is a painful but historically normal correction in a market that got way too leveraged and overheated. Bitcoin has gone through 70%+ drawdowns multiple times in its history and has always come back stronger.
What I’m Watching Next
The key level everyone is watching right now is $70,000 for Bitcoin. If that holds as support, we could see a relief rally. If it breaks convincingly, the next major support zone is in the $55,000-$60,000 range. Either way, I think the most important thing right now is to stay informed, manage your risk, and not make emotional decisions.
This crash is painful, but it’s also creating opportunities for those who are patient and strategic. The crypto crash reason this time around is clear: too much leverage, institutional pullback, and a tough macro environment. But none of those things are permanent. Markets cycle, and this one will too.
Make sure to watch the full video above for my complete breakdown, and stay tuned for more updates as this situation develops.
Michael Gu
Michael Gu, Creator of Boxmining, stared in the Blockchain space as a Bitcoin miner in 2012. Something he immediately noticed was that accurate information is hard to come by in this space. He started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share his experiences. Being based in Asia, Michael also found a huge discrepancy between digital asset trends and knowledge gap in the West and China.