Markets Drop 5.1% with XRP Hit Hardest

Crypto markets sold off on Feb. 6 with the average tracked asset down 5.1%, as breadth deteriorated to 113 assets up versus 232 down. News flow skewed negative with 17 positive items against 29 negative, and the tape reflected forced de-risking rather than single-asset idiosyncrasies, with multiple large-cap and high-beta tokens posting double-digit declines.

The day’s central driver was renewed stress around bitcoin’s drawdown and the mechanics of the selloff, as volatility measures and liquidation tallies moved back toward prior crisis levels in several reports. CoinDesk flagged a “volatility fear gauge” at an FTX-era peak while CoinJournal cited $840.0m in liquidations as bitcoin fell back below $70,000 before stabilizing above $71,000 later in the session, a profile consistent with leveraged longs being cleared and spot demand only partially absorbing supply. The market reaction was broad-based and indiscriminate, with correlations rising and altcoin beta amplifying downside as participants prioritized reducing exposure over rotating within crypto.

The second key story was ETF flow pressure and its signaling effect on marginal demand, with Cointelegraph reporting $545.0m of outflows from bitcoin ETFs as price approached the $70,000 area. That matters because ETF creations and redemptions have become a visible, daily proxy for institutional risk appetite, and persistent outflows tend to coincide with weaker intraday rebounds and thinner bids in large-cap spot. The same theme helped frame the outsized move in XRP, which fell 20.8% after CoinDesk reported it as the worst drop among major tokens; in a tape dominated by macro de-risking, XRP’s decline looked less like a single headline shock and more like a liquidity-driven unwind in a token that often trades as a high-beta proxy during stress.

A third development was evidence of distribution and balance-sheet strain across crypto-linked equities and treasuries, reinforcing the negative feedback loop between price and risk capacity. Cointelegraph reported large bitcoin holders’ share of supply at a 9-month low, while Decrypt highlighted crypto treasuries moving “deeply underwater” as bitcoin, ether and solana fell, and separate coverage pointed to miner and miner-equity pressure after earnings misses. These stories matter less as immediate catalysts than as constraints: when miners and corporate holders face tighter financing conditions and weaker equity prices, the market tends to price in higher future supply and lower willingness to warehouse risk.

Price action by sector showed a clear pattern of high-beta segments underperforming, particularly gaming and metaverse-linked tokens. Axie Infinity (AXS) fell 19.9% and The Sandbox (SAND) dropped 19.5% and 18.5% across prints, consistent with retail-heavy positioning and thinner liquidity exacerbating downside during broad risk-off sessions. DeFi and smart-contract beta also weakened sharply, with Lido (LDO) down 19.3% and 17.6%, Optimism (OP) down 16.7%, and Sui (SUI) down 16.8% and 16.5%, suggesting the market was not discriminating between cash-flow narratives and growth narratives, but rather repricing duration and leverage in one move.

The most notable gap between moves and headlines was in privacy assets, where Monero (XMR) fell 20.7% and 20.5% without clear catalyst, a magnitude more typical of regulatory or exchange-access shocks than a routine risk-off day. That disconnect points to either thin liquidity, position concentration, or off-exchange flows that did not surface in mainstream headlines, and it is consistent with the broader theme of forced selling. Conversely, several positive or constructive items failed to translate into price support, including Tether’s $150.0m stake in Gold.com and CME’s reported support for additional altcoin products, underscoring that incremental good news is being discounted while participants focus on balance-sheet repair and downside protection.

The clearest takeaway is that the market is trading the plumbing—flows, leverage, and volatility—more than narratives, and that makes tomorrow’s risk primarily about whether selling pressure persists as ETF flow data and liquidation metrics update. Watch for whether bitcoin can hold the psychologically important $70,000 area on a closing basis and whether breadth improves from today’s 113-to-232 split; a stabilization there would likely reduce forced selling in high-beta alts, while another wave of outflows or renewed liquidation spikes would keep the downside skew intact, particularly in gaming, DeFi beta, and thinly traded segments that moved without clear catalyst today.