The cryptocurrency market is witnessing one of its most brutal selloffs in recent history this Friday, February 6, 2026, as Bitcoin (BTC) plunged below the critical $60,000 support level for the first time since late 2024. The digital asset's collapse has triggered a wider market bloodbath, liquidating over $2.7 billion in leveraged positions overnight. The crash coincides with a disastrous fourth-quarter earnings report from the newly rebranded Strategy Inc. (formerly MicroStrategy), which revealed a staggering $12.4 billion net loss, fueling panic among institutional investors already jittery over the Federal Reserve's future direction.

Strategy Inc.'s $12 Billion Nightmare

The epicenter of today's market earthquake is undoubtedly Tysons Corner, Virginia, headquarters of the firm now known simply as Strategy Inc. (NASDAQ: MSTR). Just days after officially dropping "Micro" from its name to reflect its massive ambition, the company reported a Q4 net loss of $12.4 billion—a figure that has stunned Wall Street.

The loss is primarily driven by a massive impairment charge on its digital asset holdings. Strategy Inc. now holds approximately 713,000 BTC, acquired at an average cost of roughly $76,000 per coin. With Bitcoin briefly touching $59,800 in early Asian trading hours, the company's entire Bitcoin treasury is officially underwater for the first time since the 2023 bear market. This "unrealized" loss has turned into a very real crisis of confidence for MSTR shareholders, sending the stock plummeting over 20% in pre-market trading.

Saylor Doubles Down Despite "Paper Losses"

Despite the historic red ink, Executive Chairman Michael Saylor remains defiant. In a statement addressing the crash, Saylor reiterated his long-term conviction, noting that the company had actually purchased an additional 855 BTC earlier this week even as prices began to slide. "Volatility is the price of performance," Saylor tweeted, signaling that the firm has no intention of selling its holdings, despite the pressure from nervous bondholders and equity investors.

Kevin Warsh Nomination Rattles Markets

While Strategy Inc.'s earnings provided the spark, the fuel for this fire was laid earlier in the week by macroeconomic shifts in Washington. The Kevin Warsh Federal Reserve nomination by President Trump has forced a rapid repricing of risk assets across the board. Warsh, a former Fed Governor known for his hawkish stance on inflation and skepticism of "easy money," is viewed by the market as a signal that the era of abundant liquidity may be coming to an abrupt end.

Analysts suggest that Warsh's nomination undermines the "Bitcoin as a liquidity hedge" narrative. Institutional crypto selloffs accelerated immediately following the announcement, as traders anticipate higher real rates and a stronger dollar in 2026. "The market is pricing in a regime change at the Fed," explained a senior strategist at JP Morgan. "If liquidity tightens under Warsh, speculative assets like crypto are the first to be repriced."

Billions Wiped Out: The Liquidation Cascade

The speed of the drop has been exacerbated by a massive leverage flush. Data from CoinGlass reveals that crypto market liquidations topped $2.7 billion in the last 24 hours, with long positions accounting for nearly 90% of the carnage. This "long squeeze" created a cascading effect; as prices hit stop-loss levels, automatic sell orders flooded the market, driving prices down further and faster than fundamental news alone would justify.

  • Total Liquidations: $2.72 Billion
  • Bitcoin Longs Liquidated: $1.4 Billion
  • Altcoin Impact: Ethereum (ETH) and Solana (SOL) are down 12% and 15% respectively.

The Crypto Fear & Greed Index has hit an all-time low of 5 ("Extreme Fear"), a level not seen since the FTX collapse. This extreme sentiment reading often signals a potential bottom, but with the macroeconomic backdrop shifting, few traders are willing to catch the falling knife just yet.

Critical Support Levels to Watch

As Bitcoin attempts to stabilize around $62,000, technical analysts are eyeing Bitcoin support levels at $58,000 as the line in the sand. A confirmed daily close below $58k could open the door to a deeper correction toward $52,000, a price point that would put severe strain on miners and highly leveraged institutions.

Conversely, for bulls to regain control, Bitcoin needs to reclaim the $69,000 level swiftly. Until then, the market remains at the mercy of macroeconomic headlines and the performance of proxy stocks like Strategy Inc., which has effectively become the market's leveraged ETF.