Bitcoin’s recent decline has not only driven prices down, but also forced investors to record losses at a rate rarely seen in the short history of cryptocurrencies.
On-chain analyst Murphy noted Friday that entity-adjusted realized losses on Bitcoin hit a record $3.2 billion on Feb. 5, a sign that traders were rushing for the exit as the market crashed.
Murphy described this step as a selling capitulation, pointing out that the extent of the stabilization of losses exceeded what the market had absorbed during some of its most famous shocks.
This came as Bitcoin fell about 10% on Friday to around $64,000, hitting its lowest levels since late 2024 and losing momentum built up after Donald Trump’s election victory.
February 5 Marks Biggest Loss Day Ever for Bitcoin, Analyst Says
“Epic level! A huge wave of consolidation losses has emerged,” the analyst said in an article translated from Chinese.
史诗级！天量亏损盘出现！
2,5,BTC体调整后的已实现亏损达到创历史记录的32亿美元。看过了这个，那前面的都是小卡拉米。
This is Luna, FTX 312/519这些黑天鹅事件.
2025.11.21… pic.twitter.com/Sl99GUgvNp– Murphy (@Murphychen888) February 6, 2026
“On February 5, Bitcoin losses (adjusted for entities) reached an all-time high of $3.2 billion. After seeing this number, all of the above seems insignificant.”
He added a list of crisis events that he said failed to produce a similar stream of losses. “Whether it was the Luna collapse, the FTX bankruptcy, or the black swan events of 312/519, none of them have ever triggered losses of this magnitude.”
Murphy also pointed out a problem with historical data that some traders may cite when comparing extreme levels. “There was also a case on November 21, 2025, but at that time Coinbase then reorganized the wallet data and the numbers were adjusted. But this time… it looks like a real panic.”
Bitcoin slipped more than 10% toward $64,000 on Friday, hitting its weakest level since late 2024, as a broad sell-off in risk assets erased post-election crypto gains.#CryptoMarketUpdate #AsiaMarketOpen https://t.co/MUsoiSrxbe
– Cryptonews.com (@cryptonews) February 6, 2026
He called the February 5 move unusual in that the market did not need a single shock to collapse.
Loss measurements taken are closely monitored for signs of seller burnout.
Murphy also responded to critics who prefer to measure losses made in Bitcoin.
“(Some people think we should use statistics denominated in Bitcoin – that’s a misunderstanding. Bitcoin price predictions are dynamic; only by measuring in dollar value can we truly gauge the level of panic selling pressure the market was experiencing at the time.)”
These allegations come as traders debate what this wave of liquidations means for the next stage of the cycle, especially since large price swings could lead to forced selling and accelerate realized losses.
Markets often monitor these indicators to know if sellers have exhausted themselves or if there is still room for fear.
Michael Burry added a new dose of tension. The founder of Syon Asset Management, who predicted the housing crisis in 2008, shared a chart of Bitcoin in the market.
In this article from last Thursday, Puri noted what Bitcoin’s decline looked like from October’s high of $126,000 to around $70,000, and compared it to the crash that occurred between late 2021 and mid-2022, when Bitcoin fell from around $35,000 to below $20,000.
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