Bitcoin just posted its biggest single-day loss in history, raising fresh concerns about further market collapse.
As liquidity thins and panic selling increases, crypto analysts’ 16-step “doomsday” scenarios are attracting attention.
and $BTC Amid pressure and market depth, traders are keeping a close eye on what happens next.
Bitcoin just posted its worst single-day loss in history, and one crypto analyst believes the market is staring down a path to zero.
Jacob King, founder of Swandesk, has broken down how Bitcoin enters what he calls a 16-step process into the world. “At worst, a completely catastrophic domino effect of cascading failures.”
$BTC It crashed towards $60,000 today, with on-chain data showing $3.2 billion in realized losses on February 5th alone.
This number is more than what investors lost in the Terra-Luna crash and FTX bankruptcy, making it the most severe single-day capitulation event in Bitcoin history.
What will King’s Bitcoin apocalypse look like?
King’s scenario begins with sustained ETF outflows causing exchange liquidity to collapse, creating what he describes as a “self-reinforcing surrender loop.” Individual investors rush to exit, but platforms freeze or go dark. Exchanges that lack reserves will begin to prohibit withdrawals completely.
Things only get worse from there. Tether is under pressure from the federal government to halt new supply and eliminate the artificial liquidity that has historically triggered rebounds. Miners, faced with diminishing pay and rising energy costs, dump ore. $BTC Place a reservation in a market that already has no buyers.
Next, a large domino appears. King warned that highly leveraged corporate holders like MicroStrategy could face margin calls and be forced into “massive involuntary liquidations” of hundreds of thousands of coins. Demand disappears. Tether Depeg. The hashrate collapses significantly and a 51% attack becomes realistic.
“The story of Bitcoin mirrors the Titanic. It was said to be unsinkable, but that was never true. We’ll soon find out.” King wrote.
Also read: Why is Bitcoin crashing today? Analysts say it’s synthetic $BTC the real problem is supply
Could Bitcoin actually fall that much?
Fear is not completely divorced from reality. Market depth, or the amount of funds available to absorb large sell orders, is down more than 30% compared to October. This illiquidity means that even moderate selling can cause a sharp decline.
Historical patterns provide some perspective. Each bearish cycle in Bitcoin has a smaller drawdown than the previous one. 93% in 2011 and approximately 77% in 2022. If this trend continues from the $126,000 peak, the potential floor is around $38,000.
Whether Dr. King’s doomsday chain will fully unfold is debatable, but traders need to exercise extreme caution.
