$2B Daily Bitcoin Losses Signal Capitulation as Markets Flash Crash Warning

• Bitcoin realized losses exceeded $2B daily for seven straight days, marking the year’s highest levels.
• S&P 500 put/call ratio hit 1.38, the highest since Liberation Day, signaling potential market crash.
• Global markets lost $12 trillion in January as gold fell 13% and silver crashed 37% amid liquidity drain.

Bitcoin markets are bleeding. Daily realized losses have crossed $2 billion as investors throw in the towel. 

The correction continues to squeeze poorly positioned traders. Meanwhile, a dangerous pattern is forming in traditional markets that could trigger a broader crash.

Bitcoin Investors Capitulate After Weeks of Losses

The crypto market has faced relentless selling pressure since January 20. Analyst Darkfost reports that realized losses now dominate trading activity. Investors are giving up as the downturn stretches on.

Between February 5 and 11, the numbers turned ugly. The seven-day average of realized losses exceeded $2 billion every single day. These figures mark the highest levels seen all year. 

The data shows weekly averages to filter out noise from UTXO consolidation transactions.

Darkfost notes that Fidelity Investments recently moved large amounts of BTC. This activity adds complexity to the data. Still, the trend is clear. Weak hands are exiting positions. Poorly positioned investors are feeling the pain.

Bitcoin has held relatively steady despite the exodus. The asset shows resilience even as capital flows out.

S&P 500 Put/Call Ratio Flashes Red Alert

An alarming pattern is emerging in equity markets. Analyst Leshka.eth warns that the S&P 500 faces imminent danger. The put/call ratio has spiked to 1.38. This marks the highest level since Liberation Day crash.

History shows what happens next. Every time the ratio climbs above 1.1 or 1.2, the S&P dumps hard. January 2024 saw a ratio of 1.2, followed by a dump. April 2024 repeated the pattern at 1.2. August 2024 hit 1.1 before falling. April 2025 reached 1.1 and dumped again.

The pattern keeps repeating. When the put/call ratio jumps, people buy more puts than calls. Dealers who sell those puts must hedge by selling S&P exposure. They dump futures and ETFs to balance their books.

This creates a feedback loop. More puts bought means dealers sell more S&P. The index loses support and rolls over. Right now, the ratio sits at extreme levels while the S&P chart pretends everything is fine.

Macro Pressures Build Across Markets

Additional headwinds are stacking up. Kevin Warsh was nominated as Fed Chair. The nominee wants to shrink the Fed’s $6.6 trillion balance sheet. Less liquidity typically means lower asset prices across the board.

Global markets already lost $12 trillion in January alone. Gold dropped 13 percent from recent highs. Silver crashed a staggering 37 percent. The contagion is spreading beyond commodities into equities.

Earnings season is exposing cracks in corporate performance. Companies are missing estimates while trading at sky-high valuations. PE ratios remain near historic highs as an economic slowdown looms.

Two Scenarios Point to Trouble Ahead

Leshka.eth outlines two possible outcomes. Neither looks good for bulls.

If the ratio stays elevated, selling pressure continues on the S&P. Dealers keep dumping to hedge their exposure. The index slowly bleeds out.

If the S&P starts slipping, hedging activity intensifies. This creates a feedback loop straight down. More selling triggers more hedging, which triggers more selling.

The setup is screaming danger, according to the analyst. When everyone buys protection this aggressively, crashes often follow. Macro conditions are deteriorating while liquidity drains from the system.

The S&P will either dump hard or dealers get wrecked on their hedges. Either way, the outcome looks bad. Markets are flashing warning signs that few seem to notice.

Bitcoin’s relative stability amid $2 billion daily losses shows investor fatigue. Traditional markets teeter on the edge with extreme put/call readings. The pieces are in place for significant downside across asset classes.