Bitcoin’s latest plunge has dragged the broader crypto market into a fresh wave of forced selling, wiping out much of the post‑election euphoria and pushing prices back toward levels last seen before Donald Trump returned to the White House. At the same time, XRP is sliding hard despite the presence of a dedicated ETF, underscoring how structural flows alone are not enough to offset souring sentiment and technical damage. I see a market where leverage, liquidity and policy uncertainty are colliding, and XRP is bearing the brunt even as Bitcoin slams into a brutal liquidation zone.
Bitcoin’s crash to $60,000 exposes a crowded liquidation pocket
The latest leg lower in Bitcoin has been defined less by a slow grind and more by an air pocket. Reports show the price suddenly dropping to $60,000, effectively erasing the gains that followed Trump’s election win and triggering a wave of forced liquidations across leveraged traders. That level has become a magnet because it sits near where many high‑risk positions were built during the post‑election rally, so once it broke, margin calls and stop orders cascaded through the order books.
Market commentary describes the move as a flash crash, with Bitcoin spiking down to the same $60,000 zone while many traders refused to “catch falling knives,” preferring to wait for signs of stabilization. That reluctance to step in on the bid side is exactly what turns a correction into a liquidation pocket, because once the market senses that dip buyers are standing aside, every incremental sell order has a bigger impact on price.
From October highs to a 50% drawdown, Bitcoin’s liquidity squeeze deepens
The violence of this move is easier to understand in the context of the past few months. Earlier in the cycle, Bitcoin was trading near twice its current level, and the subsequent slide means it has now lost roughly half its value in about three months. That kind of drawdown is not just a routine correction, it is a stress test for the most aggressive participants in the ecosystem, especially those who borrowed heavily or piled into derivatives during the run‑up.
Analysts tracking intraday flows describe a market whipsawed by a liquidity squeeze rather than a simple loss of faith in digital assets. In one account, BTC swung violently but still managed to edge up about 5 percent within an hour as liquidation-driven selling met opportunistic buying. That pattern, sharp dumps followed by equally sharp bounces, is classic for a market where funding is tight and large players are scrambling to meet margin calls, and it helps explain why the $60,000 area has turned into a brutal clearing zone for over‑leveraged positions.
IBIT liquidation fears and ETF outflows amplify Bitcoin’s pain
Behind the price action, I see growing concern about concentrated risk in institutional products. One detailed analysis links the latest drop in Bitcoin and Solana to forced selling by an entity tied to the IBIT hedge fund, with Parker White, Chief Investment Officer at DeFi Dev Corp, suggesting that such a liquidation would be difficult to hide given the size of the flows. If a large, leveraged player is indeed unwinding, that would help explain the sudden spikes in volume and the way key levels have been sliced through without much resistance.
At the same time, spot Bitcoin ETFs are no longer acting as a one‑way inflow machine. Reporting on the move to $60,000 highlights heavy outflows from these vehicles, which had previously been celebrated as a structural tailwind for the asset. When those same products start to see redemptions, they can flip into a source of mechanical selling, because each share cashed out requires the underlying Bitcoin to be sold into an already thin market.
XRP’s ETF paradox: inflows up, price down
While Bitcoin’s drama plays out in the futures and ETF arena, XRP is facing its own paradox. Earlier this year, a dedicated ETF helped XRP jump about 25 percent as inflows topped $1 billion, a sign that institutional and retail investors were eager to gain exposure through regulated products. That surge briefly positioned XRP as one of the standout performers of the year, with the XRP‑USD pair benefiting from the same narrative that had powered Bitcoin’s ETF boom.
The mood has shifted sharply. A separate analysis asks why XRP is falling even after the successful launch of the Canary Capital XRP exchange‑traded fund, noting that the product has seen solid inflows while the token’s spot price keeps sliding. That contrast reveals a structural disconnect, where ETF demand is not strong enough to offset broader selling pressure in the underlying market, and it suggests that investors using the fund are either too small in aggregate or too cautious to counteract the unwind of leveraged positions elsewhere.
XRP tanks to post‑election lows as technicals and macro turn against it
The price chart for XRP now looks decisively bearish. As of February 5, As of February, XRP is trading in a range around $1.46 to $1.50 after a sharp 7 percent daily decline, with the pattern of lower highs and lower lows confirming a downtrend. Technical analysts describe the profile as strongly bearish, which is exactly the kind of backdrop where any negative macro or regulatory headline can trigger outsized moves to the downside.
Those technical warnings are already being validated. One breakdown notes that XRP Price Slides as Key Support Breaks, with Technical indicators such as The Relative Strength Index flashing oversold conditions and raising the risk of a move toward the $1.00 area if sentiment does not improve. Another report points out that XRP has crashed to its lowest level since Trump won the U.S. election, with the payments‑focused token selling off as Payments investors retreat from risk and Bitcoin’s slide drags the entire sector lower.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
