Bitcoin Crashes Toward $60K in Worst Day Since FTX Collapse

10.5% in a single day. That's how far Bitcoin fell on February 5th, marking its steepest one-day decline since the FTX exchange collapsed in November 2022.

When Everything Falls Apart

Bitcoin crashed to $63,000 during afternoon U.S. trading hours, extending this week's crypto selloff into what traders are calling a bloodbath. The world's largest cryptocurrency has now fallen 50% from its record high of $126,000 hit in early October, dropping below even its 2021 peak.

But crypto wasn't alone in the carnage. Silver plunged 15% in a single day and is now trading 40% below its record high from just a week ago. Gold also fell more than 2% to $4,850, though it weathered the storm better than its precious metal cousin.

The pain spread to traditional markets too. Software stocks, which often move in lockstep with bitcoin, continued their slide with the iShares Expanded Tech-Software ETF falling more than 3%. The S&P 500 and Nasdaq both dropped 1%, while crypto-related stocks like Coinbase, Galaxy, and MicroStrategy tumbled over 10%.

The Liquidity Desert

"One big factor is just very thin liquidity," explained Adrian Fritz, chief investment strategist at 21shares. "If there is a bit of sell pressure, it usually triggers a lot of liquidations."

It's a vicious cycle in fragile market conditions. With only a handful of buy and sell orders cushioning trades, even modest selloffs can trigger massive price swings, which in turn force more liquidations. While some analysts have been calling bottoms for weeks, Fritz isn't convinced.

"There's still no signal that we bottomed out. I think it's too early. There's no confirmed turnaround," he said, pointing to the 200-day moving average around $58,000 to $60,000 as a critical support level to watch. This range also aligns with bitcoin's "realized price" — the average cost basis of all bitcoin holders.

Altcoins Face Brutal Reality

If bitcoin's 10% drop seemed severe, altcoins faced an even harsher reality. XRP led the decline with a 19% plunge over 24 hours, while almost every major token in the CoinDesk index fell more than 10%.

"From a technical point of view, there's not a lot of support levels for XRP," Fritz noted, highlighting how some cryptocurrencies lack the technical foundation that might cushion further falls.

The selloff was indiscriminate — from established cryptocurrencies to meme coins, nothing was spared in Thursday's market rout.