Crypto Liquidations Hit 580,000 in 24 Hours! 'The Big Short' Warns of a Repeat of the 2022 Crash
As Bitcoin continues its relentless downward spiral, famed short-seller Michael Burry—of The Big Short fame—has issued a dire warning: Bitcoin may be repeating its 2021-2022 collapse pattern. This trajectory suggests prices could plunge toward $50,000 or lower.
Burry, who rose to prominence for his masterstroke shorting mortgage-backed securities before the 2008 financial crisis, was immortalized in Michael Lewis's book and the subsequent Oscar-winning film.
On February 5, Burry posted a comparative price chart on X with the simple caption: "Bitcoin Chart Pattern." Red arrows on the chart draw a chilling parallel between Bitcoin's recent drop from $126,000 to $70,000 and its previous historic crash from $35,000 to below $20,000.
Analysts note that while Burry didn't provide an exact price target, the message is unmistakable: if history repeats, Bitcoin is headed well south of $50,000.
It is worth noting, however, that the 2021-2022 crash occurred in a vastly different landscape. At that time, the Federal Reserve was launching an aggressive rate-hiking cycle, retail leverage was unsustainable, and platforms like Terra and FTX were imploding. Today’s market features institutional ETF support, significantly deeper liquidity, and a more robust regulatory framework.
This isn't Burry's first red flag lately. On February 3, he published a detailed analysis on Substack outlining why Bitcoin is entering a "danger zone." He warned that if Bitcoin dropped another 10% from its early-week levels, "unsettling scenarios are about to emerge."
Burry argues that Bitcoin has exposed itself as a purely speculative asset, failing to establish the "inflation hedge" status typically held by precious metals. He warned that further declines could quickly pressure the balance sheets of major holders, triggering forced selling and widespread value destruction.
He specifically called out Strategy Inc., the world’s largest corporate Bitcoin treasury. "If Bitcoin drops another 10%, the company will face billions in paper losses and may find itself nearly unable to refinance in capital markets," Burry wrote. He further warned that a move to $50,000 would not only devastate miners but trigger a domino effect across other financial markets.
The sell-off accelerated Friday morning as Bitcoin briefly flashed below the $60,000 mark before recovering to near $64,000. Since its all-time high of $126,000 last October, the cryptocurrency has officially lost half its value.
According to CoinGlass data, 579,506 traders were liquidated in the last 24 hours, totaling $2.603 billion. Long positions accounted for the lion's share at $2.174 billion, while short liquidations totaled $429 million.
Deutsche Bank analyst Marion Laboure noted that the downturn is a "perfect storm" of hawkish Federal Reserve signals, institutional outflows, thinning liquidity, and stalled regulatory progress.