Bitcoin, the world’s leading cryptocurrency, clawed back modest gains on Monday, February 2, 2026, trading around $77,926 at 8:37 a.m. ET—up about 1% on the day per CoinMetrics data—following a sharp weekend plunge that saw it dip below $80,000 for the first time since April 2025.
The asset bottomed at $74,876 amid thin liquidity, capping a 12% weekly decline that wiped over $200 billion from its market capitalization, according to CoinMarketCap figures. The sell-off, which accelerated over the weekend, aligned with a broader risk-off wave sweeping global markets, as noted by Dessislava Ianeva, research analyst at crypto exchange Nexo.
She told CNBC the drawdown was “amplified by structurally thin weekend liquidity, rather than by crypto-specific developments or signs of fundamental stress,” pointing to correlations with traditional risk assets. U.S. stocks tumbled Friday, dragged by a 10% drop in Microsoft shares after disappointing earnings, with negativity spilling into European and Asian indexes on Monday.
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Precious metals extended their historic rout, with silver suffering a 30% plunge Friday—its worst day since March 1980—and gold deepening losses amid expectations of sustained or higher interest rates. This safe-haven breakdown, coupled with Bitcoin’s sensitivity to macro shifts, exacerbated the decline.
Yuya Hasegawa, analyst at Japanese crypto firm Bitbank, attributed the move to “rising geopolitical risk, a decline in tech equities triggered by Microsoft, and a breakdown in precious metals—one of the few remaining safe-haven outlets for investor capital in recent weeks.” Forced liquidations played a pivotal role in the cascade. CoinGlass data revealed over $2 billion in Bitcoin long and short positions liquidated since Thursday, with total crypto liquidations hitting $2.56 billion on Saturday—the 10th-largest single-day event on record.
These automatic sales, triggered when leveraged positions hit price thresholds, amplified downward pressure in volatile markets. The nomination of Kevin Warsh as Federal Reserve chair by President Donald Trump added to the uncertainty. Warsh’s hawkish stance—emphasizing monetary discipline and a smaller Fed balance sheet—has been interpreted as bearish for risk assets, including crypto, potentially delaying rate cuts and strengthening the dollar.
While Bitcoin has sometimes been positioned as an inflation hedge or “digital gold,” its 22% drop over the past year underscores its vulnerability during volatility. Investor sentiment has cooled markedly. CoinShares reported $1.73 billion in outflows from digital asset investment products for the week ended January 30—the second consecutive week of heavy redemptions—pushing year-to-date outflows to $1 billion.
James Butterfill, head of research at CoinShares, described this as “a marked deterioration in investor sentiment towards the asset class,” citing waning rate-cut expectations, negative price momentum, and disappointment over crypto’s exclusion from the “debasement trade.” Other major cryptocurrencies mirrored the downturn, with Ether and XRP posting losses after multi-day sell-offs. The broader crypto market cap contracted by about 10% over the week, reflecting synchronized pressure.
Analysts offer varied outlooks on Bitcoin’s trajectory. Hasegawa suggested a “short-term bottom” may be approaching around $70,000, a key psychological and technical level; a sustained break below could signal deeper resets. Technical indicators show Bitcoin decisively below its 100-week simple moving average around $85,000, confirming seller control after two months of support, with the next major zone at $75,000—where buyers intervened in April 2025.
More bearish views include John Blank, chief equity strategist at Zacks Investment Research, who warned on CNBC’s “Squawk Box Europe” that Bitcoin could slide to $40,000 in 2026. Blank based this on historical cycle patterns, noting past “crypto winters” featured 70% to 80% drawdowns from peaks. From Bitcoin’s all-time high of $126,000 in October 2025, $40,000 would represent a roughly 70% plunge, potentially unfolding “very quickly or more likely over the next six to eight months.”
On-chain metrics provide some counterbalance. Despite the price weakness, 335,000 new Bitcoin wallets were created during the dip, signaling rising adoption and potential accumulation by fresh buyers. Quantitative models suggest Bitcoin is 35% undervalued relative to its 15-year trend, with projections for rebounds to $113,000 by mid-2026 and beyond $160,000 by early 2027.
The episode highlights Bitcoin’s maturation as an asset class, increasingly intertwined with macro narratives like Fed policy and equity trends. As liquidity returns post-weekend and key U.S. labor data looms, including JOLTS and ADP reports, Bitcoin’s ability to hold above $75,000 will be crucial in determining whether this correction deepens or reverses.
Currently, the market’s fragility amid thin trading and cascading liquidations is telling of crypto’s volatility, even as long-term adoption metrics trend positive.