Bitcoin suffered its worst weekend decline since April 2025, crashing to approximately $74,674 early Sunday as escalating U.S.-Iran tensions, Federal Reserve tightening, and a massive leverage cascade triggered what traders are calling “Black Sunday II.” More than $2.5 billion in leveraged positions were liquidated across major exchanges, with the total cryptocurrency market cap falling to $2.66 trillion.
What Happened: Bitcoin’s Weekend Bloodbath
Bitcoin plunged to a weekend low of approximately $74,674 early Sunday morning, marking its steepest single-weekend decline since the April 2025 “Liberation Day” tariff crash. The flagship cryptocurrency is now trading roughly 40% below its 2025 all-time high, a drawdown that has rattled even battle-hardened market participants.
The selloff was not limited to Bitcoin. Ethereum fell to approximately $2,164, shedding around 12% of its value. Solana dropped between 10% and 11%, while XRP declined roughly 10%. The total cryptocurrency market capitalization fell to $2.66 trillion, with an estimated $290 billion erased over the weekend alone. Since the October peak, roughly $800 billion in total market value has disappeared.
By midnight UTC on February 2, both BTC and ETH had posted modest recoveries of approximately 1%, suggesting that the worst of the selling pressure may have subsided — at least temporarily.
Why It Happened: A Perfect Storm
The crash did not stem from a single catalyst. Instead, several factors converged during one of the thinnest liquidity windows of the week.
Geopolitical escalation. Rising U.S.-Iran tensions dominated headlines throughout the week, pushing risk assets broadly lower. Crypto markets, which trade around the clock, absorbed the brunt of weekend fear-selling while equities remained closed.
Fed tightening. The Federal Reserve’s continued rate hikes have progressively drained liquidity from speculative markets. Bloomberg reported that net inflows to crypto funds turned negative for the third consecutive week, reflecting institutional caution amid tightening financial conditions.
Weekend liquidity vacuum. Crypto’s 24/7 market structure is a double-edged sword. With market makers operating at reduced capacity over weekends, order book depth thins dramatically. When heavy selling meets shallow bids, the result is amplified downside — exactly what played out on Saturday night into Sunday.
Leverage cascade. Perhaps the most destructive factor was the mechanical unwinding of leveraged positions. As BTC broke below key support at $82,000, a cascade of stop-losses and liquidation triggers accelerated the decline. Traders familiar with how liquidation cascades develop will recognize the pattern: forced selling begets more forced selling, creating a self-reinforcing spiral that feeds on itself until bids are exhausted.
The Liquidation Carnage: $2.5 Billion Wiped
The numbers are staggering. According to CoinGlass data aggregated by CoinDesk, more than $2.5 billion in leveraged positions were liquidated across major exchanges during the weekend selloff, earning it the moniker “Black Sunday II” among traders on social media.
The bulk of liquidations were long positions — traders who had bet on continued upside. This pattern echoes the January 2026 crash below $82,000, though the scale of this weekend’s event was considerably larger.
Adding fuel to the controversy, market makers have pointed to Binance’s role in the selloff. Reports circulated on crypto Twitter alleging that approximately $19 billion in liquidation cascades originated from or were amplified by Binance’s matching engine. While no formal investigation has been announced, the claims have reignited debate about exchange transparency and the structural risks of concentrated market depth. Traders who have studied common leverage trading mistakes know that exchange-level risk is often underestimated.
Market Reaction and Notable Voices
The crypto community’s response has been predictably divided between those calling for further downside and those positioning for a recovery.
CNBC’s Jim Cramer weighed in on the selloff, noting what he described as a potential double bottom forming at the $82,500 level — the approximate floor from the January correction. If that level holds on a retest, Cramer suggested, it could indicate a medium-term floor for Bitcoin. Whether the weekend’s breach of that level invalidates the thesis remains an open question.
Cardano founder Charles Hoskinson took a more bullish stance, urging followers to treat the dip as a buying opportunity. “This is exactly where generational wealth is built,” Hoskinson posted on X, though he did not specify entry levels or risk parameters.
On-chain analytics firms noted a spike in stablecoin inflows to exchanges beginning late Sunday, which historically signals that sidelined capital is preparing to re-enter the market. However, funding rates on perpetual futures remain deeply negative, indicating that short sellers still have conviction.
What Comes Next: Key Levels and Outlook
The immediate question is whether Bitcoin can reclaim and hold the $77,000 to $80,000 range that served as support through much of Q4 2025.
From a technical perspective, there are several levels to watch. The $74,000 to $75,000 zone — roughly where the weekend low printed — will serve as the critical line in the sand. A sustained break below that level could open the door to a test of $68,000, which represents the next major support from mid-2025 price action. Understanding how to read crypto charts becomes essential in environments like this.
On the upside, reclaiming $82,500 would validate Cramer’s double-bottom thesis and potentially trigger a relief rally fueled by short covering. The weekend’s thin liquidity cuts both ways — just as it amplified the decline, any significant buying pressure in the coming days could produce an outsized bounce.
For traders navigating this environment, risk management has never been more important. Those trading futures during high volatility should be especially cautious with position sizing and leverage ratios. Understanding the difference between cross margin and isolated margin can also help contain losses when markets move this aggressively. The difference between a manageable drawdown and a blown account often comes down to preparation made before the volatility arrives.
The macro backdrop remains challenging. U.S.-Iran tensions show no signs of de-escalation, and the Fed’s next rate decision — scheduled for mid-February — could provide either relief or additional pressure depending on the statement’s tone. Crypto markets are likely to remain headline-driven in the near term.
One thing is certain: weekends like this one serve as a reminder that in crypto, risk never sleeps.
Related Reading
- Understanding Crypto Liquidation Cascades: Prediction and Prevention
- Trading Crypto Futures During High Volatility: A Complete Guide
- Common Leverage Trading Mistakes and Lessons Learned
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