Bitcoin Tumbles Below $71,000, Erasing Billions in Market Value
Cryptocurrency investors faced a brutal start to the week as Bitcoin (BTC) plunged more than 7% on Monday, briefly dipping below the $71,000 threshold. The sell-off, which began in early Asian trading hours, marks the digital asset's steepest single-day decline since early November 2024, casting a pall over a market that had recently shown renewed vigor.
The ripple effect was immediate and severe across the broader digital asset landscape. The total global cryptocurrency market capitalization contracted by approximately 6%, falling to around $2.5 trillion. Major altcoins followed Bitcoin's lead into the red, with Ethereum (ETH) dropping 7% to hover near $2,100 and Solana (SOL) facing significant pressure.
The volatility proved catastrophic for leveraged traders. Data from analytics platform CoinGlass reveals that over $850 million in crypto futures positions were forcibly closed (liquidated) within a 24-hour window. The majority of these—roughly $708 million—were bullish "long" bets that turned sour as prices fell. Bitcoin alone accounted for nearly $407 million of these liquidations, impacting over 175,000 traders. A single massive BTC/USDT trade valued at over $11.3 million was among the largest casualties.
The downturn also spotlighted the fortunes of corporate Bitcoin holders. MicroStrategy (MSTR), the business intelligence firm turned flagship Bitcoin treasury vehicle, saw the value of its colossal 713,502 BTC stash diminish substantially. Analysis from the Kobeissi Letter suggests the company's Bitcoin holdings have shed nearly $40 billion in value over the past four months. Its stock price reflected the anxiety, falling 3% in regular trading and extending losses after hours ahead of its Q4 2025 earnings report due February 5th.
Market analysts point to a confluence of factors for the sudden drop, including profit-taking after a recent rally, concerns over macroeconomic indicators, and potential regulatory shadows. The key question now is whether this represents a healthy correction within a longer bull cycle or the precursor to a deeper retracement. All eyes are on the $70,000 support level for Bitcoin, a breach of which could signal further downside.
Marcus Chen, Portfolio Manager at Horizon Digital Assets: "This is a classic volatility shakeout. The fundamentals for Bitcoin adoption haven't changed overnight. We've seen these 5-10% pullbacks repeatedly throughout every major bull market. It's painful for over-leveraged positions, but it likely cleanses excess speculation from the system."
Anya Petrova, Independent Crypto Trader: "It's absolute carnage out there. The so-called 'safe' $70k floor just vanished. This exposes the whole 'digital gold' narrative as fragile when real fear hits the market. The leverage in this system is a ticking time bomb, and millions just got blown up. When does the SEC step in?"
David Riggs, Economist at FinTech Analytics Group: "The correlation with traditional risk-off movements is notable. This isn't happening in a vacuum. We're seeing pressure on tech stocks and other speculative assets. Crypto remains highly sensitive to shifts in liquidity expectations and broader investor sentiment."
Sarah Lim, CTO of a Blockchain Infrastructure Startup: "The short-term price action is noise for builders. Network activity and developer engagement on major chains remain strong. While headlines focus on liquidations, we're focused on the underlying technology adoption, which continues unabated."
This report includes information originally published by TheStreet. Market data is subject to real-time changes.