Bitcoin’s Liquidation Storm: A Temporary Setback or a Deeper Correction?
On February 12, 2026, the cryptocurrency market was rocked by a violent downturn as Bitcoin (BTC) failed to sustain its momentum near the $95,000 resistance level. The flagship digital asset experienced a sharp and rapid retreat, plummeting below the $88,000 mark. This dramatic move effectively erased the gains achieved during its recent rally to a peak of approximately $98,000. The sell-off triggered one of the most significant liquidation events witnessed in months, with data from analytics platform CoinGlass revealing that over $1 billion worth of leveraged positions were forcibly closed. This liquidation wave impacted an estimated 200,000 traders, drawing comparisons in scale to the market turmoil following the collapse of the FTX exchange. The primary catalyst for this accelerated decline appears to be a convergence of market forces, chief among them being excessively leveraged long positions held by traders betting on a continued bullish run. As the price began to slip from its highs, a cascade of margin calls and automatic liquidations ensued, exacerbating the downward pressure in a classic deleveraging spiral. This event serves as a stark reminder of the inherent volatility and risks within the cryptocurrency derivatives market. While the immediate price action is bearish, the underlying fundamentals of Bitcoin—including its fixed supply and growing institutional adoption—remain unchanged for many long-term proponents. Market analysts are now closely watching key support levels to determine whether this represents a healthy correction to wash out speculative excess or the beginning of a more prolonged bearish phase. The event underscores the critical importance of risk management, especially when utilizing leverage, in the highly volatile digital asset space.
Bitcoin's Sharp Retreat Below $88,000 Triggers $1 Billion Liquidation Event
Bitcoin's failure to hold resistance near $95,000 precipitated a rapid descent below $88,000, erasing gains from its recent $98,000 peak. The selloff cascaded into one of the largest liquidation waves in months, with CoinGlass data showing over $1 billion in Leveraged positions unwound across 200,000 traders—a scale reminiscent of the FTX collapse.
Three forces converged to accelerate the decline: overleveraged futures markets, deteriorating macro liquidity, and geopolitical tensions sapping risk appetite. The drop underscores how crypto price action is increasingly dictated by derivatives flows rather than organic spot demand.
Early buyers now watch for signs of capitulation. Historical patterns suggest such flushouts often precede rallies when excess leverage is purged from the system.
Foundry USA Adjusts Mining Operations Ahead of Winter Storm, Impacting Bitcoin Hashrate
Foundry Digital has proactively reduced its hashrate from 1.08 ZH/s to 780 EH/s in anticipation of severe winter weather affecting key U.S. mining locations. The MOVE comes as a snowstorm threatens to disrupt operations, highlighting the vulnerability of mining infrastructure to seasonal conditions. Despite the slowdown, Foundry has emerged as the top mining pool, overtaking Antpool, which also curtailed capacity from 335 EH/s to 141 EH/s.
The collective pullback has driven Bitcoin's total network hashrate to a six-month low of 742.93 EH/s. This downturn underscores the outsized role U.S.-based mining plays in securing the bitcoin network and shaping future data center investments. While winter typically dampens mining activity—particularly for hydro-reliant operations—the reduced competition has lowered network difficulty to a three-month low, potentially boosting rewards for remaining miners.
Polymarket’s U.S. Comeback Positions Prediction Markets as a Coinbase Retention Play
Polymarket has re-entered the U.S. market with regulatory approval from the CFTC, marking a strategic shift for prediction markets. The platform, previously restricted in 2022, now offers sports-related event contracts, with plans to expand into politics and crypto. Clear Street analyst Owen Lau sees this as a potential engagement tool for major platforms like Coinbase.
The approval allows Polymarket to onboard brokerages and customers directly, operating on regulated U.S. venues. By 2026, prediction models could play a pivotal role in fact-checking and truth verification, according to analysts.
Aggressive pricing accompanies the comeback—10 basis point taker fees and zero Maker fees set a new benchmark for the industry. This ultra-low fee structure underscores growing competition in prediction markets and sports betting.
70% of Institutions Say Bitcoin is Undervalued Despite 30% Crash – Bitcoin About to Rally?
Most institutional investors remain bullish on Bitcoin despite brutal fourth-quarter volatility that erased nearly a third of the asset’s value from recent peaks. A new Coinbase Institutional and Glassnode survey found 70% of institutions view BTC as undervalued, even after the token dropped from above $125,000 in early October 2025 to trade around $90,000 by year-end. Meanwhile, 60% of non-institutional investors share that conviction.
The findings come from a quarterly poll of 148 global investors, split between 75 institutions and 73 non-institutions, conducted between December 10, 2025, and January 12, 2026. Despite the October liquidation event that shook altcoin markets and compressed leverage across derivatives platforms, most respondents held or added to crypto positions rather than retreating. Around 62% of institutions and 70% of non-institutions either maintained existing allocations or increased net long exposure since October.
Bearish sentiment has risen but doesn’t dominate positioning. Perceptions of the market cycle shifted noticeably during the quarter, with 26% of institutions and 21% of non-institutions now believing crypto has entered the bear-market markdown phase—up sharply from just 2% and 7%, respectively, in the prior survey. This shift exposes the weight of October’s deleveraging event.
