Cryptocurrency markets swung violently on February 8 as bitcoin first plunged toward $60,000 intraday before rallying to about $70,979 by the evening, briefly touching $71,000. The scramble of leveraged positions produced a surge of forced liquidations: data from liquidation tracker CoinGlass show more than 91,400 accounts wiped out in the past 24 hours, with total liquidations exceeding $300 million.
The rout is the latest chapter in a broader downtrend that began after bitcoin peaked near $125,000 last October. The token broke key psychological levels in quick succession — below $80,000 on January 31 and beneath $70,000 on February 5 — and is now roughly half its autumn high. Predictive markets reflect growing pessimism: Polymarket prices imply an 82% chance bitcoin will fall under $65,000 this year and about a 60% chance it will drop below $55,000.
Market participants point to a mix of heavy leverage, concentrated holdings in tech and digital-assets exposures, and a collapse of crypto’s recent market narrative — from an inflation hedge to a mainstream store of value. Jefferies economist Mohit Kumar notes that investors are recalibrating positions across software, tech, cryptocurrencies and precious metals, while raising concern over leveraged crypto miners who could be forced into distress-level selling if prices slide further.
Prominent voices have amplified the sense of risk. Investor Michael Burry warned that continued declines could trigger a “death spiral” and a broad collapse of value, arguing bitcoin remains predominantly a speculative asset rather than a reliable inflation hedge like gold. Meanwhile, a U.S. Treasury official named in the Chinese coverage, identified as Scott Bessent, reportedly said the government lacks authority to buy cryptocurrencies and would not step in to rescue markets — a signal that regulatory backstops are unlikely.
The immediate significance is twofold. First, forced liquidations and algorithmic selling can intensify volatility and propagate shocks across trading venues and correlated assets. Second, the erosion of the “safe-haven” or mainstream investment narrative removes a layer of buyer support, meaning rallies could be short-lived unless structural demand reappears. For policymakers and large institutional investors, the event underscores the operational and systemic risks that accompany leverage and concentrated crypto exposure.