The cryptocurrency market faced significant pressure on February 2, 2026, as Bitcoin (BTC) dipped below $77,000 and several major altcoins experienced sharp declines. This downturn reflected a broader sell-off driven by forced liquidations, low liquidity, and external economic factors.
The total crypto market capitalization dropped about 2.8% to roughly $2.6 trillion. Bitcoin traded around $76,000 to $77,000 at various points during the day (with some reports showing it as low as the mid-$70,000s before partial rebounds), marking a decline of approximately 2.6% to over 5% in the previous 24 hours depending on the exact timeframe. This placed BTC well below its all-time high near $126,000 from October 2025, representing a correction of about 38-40% from that peak—a level analysts note has occurred in past bull cycles without ending the overall uptrend.
Altcoins felt even heavier losses. XRP fell 4.5% to around $1.59, Chainlink (LINK) slid 5.5% to $9.48, and Monero (XMR) plunged 12% to $405. Other major coins like Ethereum, Solana, and Dogecoin saw double-digit percentage drops in recent sessions, highlighting a widespread risk-off mood across the sector.
Trading activity intensified amid the slide. Liquidations surged dramatically, with reports of $520 million to as high as $1.68 billion in positions wiped out over short periods—mostly long bets that got forcibly closed as prices fell. Open interest in derivatives rose, showing traders were still applying leverage despite worsening conditions, which amplified volatility in a market with thin liquidity. Weekend and low-volume periods made price swings more extreme, as order books couldn’t absorb large sell orders smoothly.
Market sentiment turned deeply negative. The Crypto Fear & Greed Index hovered in the extreme fear zone around 14, while momentum indicators like the relative strength index averaged around 35, signaling buyer hesitation and oversold conditions.
Analysts largely attributed the drop to structural factors rather than any single news event. Thin liquidity combined with high leverage created cascading liquidations, leading to rapid price gaps. External pressures added to the caution: hawkish signals from the Federal Reserve, a stronger U.S. dollar reducing appetite for risk assets, ongoing U.S. government shutdown uncertainty, and geopolitical tensions (including U.S.-Iran relations) all weighed on confidence. Bitcoin has recently behaved more like a high-risk tech stock than a safe-haven asset, correlating with broader market de-risking that also hit gold and silver.
Uncertainty around U.S. crypto regulations, with key bills stalled, continued to dampen long-term optimism. Spot Bitcoin ETFs saw substantial outflows—around $6 billion in recent periods—indicating institutions pulling back risk exposure.
Opinions among analysts remain divided on the correction’s depth and outlook. Some view it as a healthy pullback in an ongoing bull market, noting historical 35-40% drawdowns during uptrends and oversold signals that have preceded recoveries. February has often been a strong month for Bitcoin historically, and on-chain data shows spikes in new addresses, suggesting newer or longer-term buyers stepping in at lower prices. Others warn of more downside, pointing to broken technical supports (like the 50-day moving average near $90,000), price dipping below realized cost basis levels, and incomplete capitulation. Bearish forecasts include potential tests of the mid-$70,000s, $69,000, or even $60,000-$65,000 if selling persists, especially ahead of upcoming U.S. economic data like non-farm payrolls and inflation reports.
Corporate holders like Strategy (formerly MicroStrategy), with over 712,000 BTC at an average cost around $76,000, saw their positions slip into unrealized losses for the first time in this cycle, pressuring related equities.
Overall, near-term conditions stay fragile with high volatility likely. Short-term traders face a defensive environment, while longer-horizon investors might see this as a high-risk, high-reward zone—potentially the deepest pullback of the cycle if supports hold, or the start of extended consolidation if they break. The market’s path depends on stabilizing macro factors, reduced leverage risks, and renewed inflows, but for now, caution dominates as the crypto space digests this sharp reset.
