Ethereum Liquidations Mount as BitMine’s Treasury Bet Turns Into a Multi-Billion Dollar Stress Test

There are bad trades, and then there’s what’s happening to BitMine’s Ethereum treasury. In a week where crypto markets have been a demolition derby, BitMine’s once-vaunted ETH bet is now being called “close to the worst trade ever” by Ross Gerber (Benzinga, 2026-02-02). The numbers are ugly: billions in paper losses, a relentless price slide, and a market suddenly obsessed with the question, how much more pain is left?

Ethereum’s price has been in freefall for five straight days, dropping over 11% in the past 24 hours alone (crypto.news, 2026-02-02). Liquidations are piling up as bullish bets get steamrolled, and the market is openly wondering if $2,000 is the next stop. BitMine, which famously loaded up its treasury with ETH at much higher prices, is now staring down the barrel of a multi-billion dollar drawdown. The schadenfreude is palpable, but the real story is what this liquidation cascade means for the broader market.

The facts are brutal. Spot ETF investors in Bitcoin are already underwater, but Ethereum’s pain is even more acute. The forced selling is feeding on itself, with margin calls triggering more liquidations, which in turn drive prices lower. It’s a feedback loop that would make even the most hardened DeFi degens wince. The crypto news cycle is gleefully documenting every twist of the knife, from CoinStats’ new perpetual DEX tracking (Coingape, 2026-02-02) to Binance’s $1 billion SAFU fund conversion to Bitcoin (Coincu, 2026-02-02), a move that looks less like confidence and more like crisis management.

Context is everything. Ethereum’s current drawdown is happening against a backdrop of macro uncertainty, with the Fed in flux, metals in meltdown, and risk assets under pressure globally. The fact that BitMine’s treasury strategy is now being held up as a cautionary tale is a sign of just how quickly sentiment can turn. In bull markets, bold bets are celebrated. In bear markets, they become punchlines.

Historically, Ethereum has weathered worse. The 2022 bear market saw ETH drop over 70% from its highs, only to stage a dramatic recovery as DeFi and NFT mania took hold. But this time feels different. The forced liquidations are not just retail capitulation, they’re institutional. When the whales start dumping, the market takes notice. The question is not whether there will be a bounce, but whether the forced selling is over.

The technicals are a horror show. ETH has sliced through every meaningful support level, with the next big line in the sand at $2,000. RSI is deep in oversold territory, but that’s cold comfort when the order book is a ghost town. The 50-day and 200-day moving averages are both rolling over, and volume is spiking for all the wrong reasons. This is not a healthy market, it’s a liquidation-driven cascade.

Strykr Watch

The levels that matter now are brutally simple. $2,000 is the psychological and technical support. A break below that, and the next stop is $1,750, with little in the way of buyers until then. On the upside, ETH needs to reclaim $2,350 just to signal that the bleeding has stopped. RSI is below 30, but in a liquidation event, oversold can stay oversold for longer than most traders can stay solvent.

The risk here is that BitMine is not the only whale facing margin calls. If other large holders are forced to liquidate, the cascade could accelerate. The market is also watching Binance’s Bitcoin conversion for signs of contagion. If ETH breaks $2,000, the next leg down could be fast and ugly.

Opportunities exist, but they’re not for the faint of heart. For aggressive traders, a flush below $2,000 could be a capitulation low worth buying, if you’re willing to stomach the volatility. For most, the smart move is to wait for confirmation that the selling has exhausted itself. Catching falling knives is a dangerous game, but the rewards can be outsized if you time it right.

Strykr Take

This is a market that punishes hubris. BitMine’s ETH treasury bet is a cautionary tale for every trader who thinks size equals safety. The liquidation cascade may not be over, but the risk-reward is starting to tilt in favor of the brave. Watch $2,000 like a hawk. When the forced sellers are done, the bounce could be violent. Until then, keep your stops tight and your powder dry.

datePublished: 2026-02-02 09:14 UTC