The crypto market on the brink? BTC drop, the “death spiral,” and Armenian investors

On February 5, 2026, the crypto market experienced a shock: Bitcoin plunged more than 10% in a single day, falling to lows near $60,000. This marks a continuation of a broader 40% correction from its late-January peak of $126,000. Shares of mining companies were hit hard as well — MARA Holdings and Riot Platforms dropped 11.6% and 10%, respectively, on Wednesday as Bitcoin refreshed its recent lows. Investors are locking in losses amid statements from U.S. authorities, mass liquidations, and widespread fear across the market, although analysts note oversold signals that could point to a potential rebound.

Causes and Triggers Behind the Drop

The events of February 5 highlighted a sharp decline: BTC fell from $73,500 to $65,000, briefly breaking below $60,000, while Ethereum lost 11% to reach $1,930. Total liquidations exceeded $16 billion, most of them tied to long positions, and ETFs saw outflows of roughly $1.5–2 billion. The Fear & Greed Index dropped to 14–19 points, signaling panic among market participants.

A key catalyst was a statement from U.S. Treasury Secretary Scott Bessent rejecting the idea of a government bailout or large-scale Bitcoin purchases. Additional pressure came from macroeconomic factors — the Federal Reserve’s “higher-for-longer” stance, tariffs introduced by the Trump administration, and ongoing geopolitical tensions. From a technical perspective, the break below the $84,000–85,000 support level triggered a cascade of stop-loss orders, while the RSI fell to 22–28, intensifying selling pressure.

The “Death Spiral”

Renowned investor Michael Burry, famous for predicting the 2008 housing market crash, warned that the continued decline could trigger a self-reinforcing “death spiral” with cascading consequences for corporate balance sheets and even precious metals markets.

In a Substack post dated February 2, Burry cautioned that breaking key support levels has brought “frightening scenarios” closer. He suggested that if Bitcoin falls another 10% from early-week levels, the largest corporate holder of Bitcoin — formerly known as MicroStrategy — could face billions in losses, effectively shutting it out of capital markets. A further drop toward $50,000 could push major miners into bankruptcy and potentially cause “tokenized metal futures to collapse into a black hole without buyers.”

How Many Bitcoins Are in Armenia? A Statistical Mystery

Interest in cryptocurrencies is growing in Armenia, but there is no precise data on how many bitcoins are held by individuals, businesses, or the government — crypto assets are not centrally tracked. Only fragmented estimates are available. The country ranks 14th in the global crypto adoption index, with about 10% of the population (roughly one in ten people) using Binance, though without a breakdown by asset type. Estimates suggest that 4.6–5.7% of Armenians — around 50,000 to 170,000 people — own cryptocurrencies, and HODL strategies are reportedly popular, according to Fintech & Retail.

Data from 2024 shows that 72 executive branch officials declared crypto assets totaling $1,456,400, of which Bitcoin accounted for $744,300 (approximately 0.012–0.015 BTC at the exchange rate at the time), Hetq reports. According to the outlet, the largest crypto holder among officials in 2024 was Aram Jivanyan, Chairman of the Military Industry Committee under the Ministry of High-Tech Industry, with assets valued at $711,000. Jivanyan has been involved in cryptography since 2010 and founded Armenia’s first startup in the field. He is followed by Armenia’s ambassador to Russia, Gurgen Arsenyan, with $250,050 in crypto assets, and former Deputy Minister of Labor and Social Affairs David Khachatryan with holdings worth $159,000.