A massive ETH transfer to Binance coincided with a high-profile trader's liquidation, triggering panic selling and billions in liquidations across the crypto market.
Ethereum's Wild Ride: Panic, Liquidations, and a Trader's Downfall
The cryptocurrency world was sent reeling on February 1, 2026, as Ethereum experienced a dramatic 17% price plunge, wiping out a staggering $2.6 billion in liquidations and famously liquidating a high-profile trader. This sharp downturn, fueled by a massive ETH transfer and broader market anxieties, has left many wondering about the future trajectory of the digital asset.
The Domino Effect: From ETH Transfer to Mass Liquidations
The catalyst for the market's distress appears to have been a significant ETH transfer of 100,000 ETH, valued at over $243 million, to the Binance exchange. Such large inflows are often interpreted by traders as a precursor to sell-offs, and this instance was no different. As the price of Ethereum tumbled from around $2,700 to a low of $2,248, a wave of panic selling ensued, exacerbating the downward spiral.
Adding fuel to the fire, Garrett Jin, a trader with a notable track record, saw his $900 million leveraged long position completely liquidated. Jin, who had previously profited handsomely from a short trade, found himself on the wrong side of a volatile market. His account, which reportedly held substantial gains, was reduced to a mere $53, a stark reminder of the brutal efficiency of leverage in the crypto space.
Beyond Jin: A Wider Financial Carnage
The ripple effect of Jin's liquidation and the subsequent ETH transfer was far-reaching. Over $2.58 billion in liquidations occurred across the crypto market within a 24-hour period, with a disproportionate amount, nearly $961 million, stemming from ETH futures positions. More than 434,000 traders were caught in the liquidation wave.
Other notable figures also faced significant losses. Huang Licheng, also known as “Brother Machi,” had his leveraged position liquidated on January 31. Furthermore, an address linked to the “CZ counterparty” saw over $10 million in unrealized gains evaporate.
External Pressures and Market Sentiment
The sharp decline wasn't solely an internal crypto affair. The weekend trading session, characterized by lower liquidity, amplified price movements. Compounding the crypto market's woes were external factors, including rising geopolitical tensions in the Middle East and new SEC guidance on tokenized stocks, which collectively dampened investor confidence. Even traditional markets like gold and silver experienced unusual double-digit declines, suggesting a broader flight to cash across asset classes.
Analysts have pointed to the extreme negative funding rates on major exchanges, reaching levels not seen since the FTX collapse. This indicates a significant bearish sentiment in derivatives markets, where short-sellers are essentially paying long-sellers to maintain their positions. While such extremes can sometimes precede market bottoms, the ongoing geopolitical uncertainties and tight liquidity suggest that caution remains the watchword.
Looking Ahead: A Cleansing Phase
The current market environment appears to be a cleansing phase, purging overleveraged positions. The confluence of a massive ETH transfer, the liquidation of a prominent trader, and external macroeconomic pressures has created a perfect storm. While the exact bottom remains elusive, the crypto market is undoubtedly undergoing a significant stress test. For now, it seems the best course of action is to buckle up and perhaps enjoy the rollercoaster ride – it’s certainly never a dull moment in the crypto universe!
