Market Analysis of Bitcoin’s Recent Performance
On February 3, 2026, Bitcoin experienced a substantial decline, retreating approximately 8% and momentarily breaching the critical psychological threshold of $73,000. This downturn was characterized by a rapid recovery that saw prices bounce back to $74,500 at the time of reporting, thereby mitigating the intraday correction to a more manageable 5.8%. Notably, this decline represents the lowest price point observed during the tenure of former President Donald Trump and signifies the weakest level witnessed since the November 2024 Presidential Election.
The selloff propelled Bitcoin to test its March 2024 all-time high of $73,500, a level that had initially demonstrated resilience amidst early selling pressure but ultimately succumbed under sustained bearish momentum. This price movement has reactivated a series of support zones that traders have meticulously monitored as critical technical thresholds over the past year.
Macro Risk-Off Sentiment Influencing Cryptocurrency Valuations
The recent weakness in the cryptocurrency market can be attributed to a broader risk-off sentiment permeating various financial markets. This sentiment was catalyzed by the nomination of Kevin Warsh as Federal Reserve Chair by former President Trump, which ignited apprehensions regarding a potentially more hawkish monetary policy and tighter financial conditions. Such pressures have historically exerted considerable downward force on high-beta assets, including cryptocurrencies.
Additionally, a strengthening U.S. dollar—which typically accompanies expectations of tighter monetary policy—has compounded the headwinds faced by digital assets. However, it is worth noting that current dollar weakness exacerbates the challenges for Bitcoin and its peers.
The disappointing growth figures from Microsoft’s Azure division further contributed to market unease, souring overall risk sentiment and triggering contagion across asset classes. The fluctuations within the AI sector underscore how cryptocurrencies remain susceptible to volatility stemming from growth-sensitive technology sectors, particularly during periods characterized by stretched positioning and limited liquidity.
Leverage Unwinding: A Catalyst for Escalated Declines
According to data from CoinGlass, over $2.5 billion in Bitcoin liquidations occurred in recent days, transforming what began as a macro-driven selloff into a cascade of forced liquidations. The thin liquidity characteristic of weekend trading exacerbated this downturn, which initially commenced at approximately $84,000 on Saturday, as noted in a report by Bitfinex.
The confluence of macroeconomic triggers and leverage unwinding has created an environment where relatively modest initial selling pressure has resulted in disproportionately larger price movements due to stop-loss orders and margin calls amplifying the decline. Furthermore, institutional flows in 2026 have exhibited uneven patterns.
Exchange-Traded Fund (ETF) inflows have frequently been followed by outflows during episodes of volatility, indicating a tendency towards tactical rebalancing rather than robust dip-buying activity. Consequently, this leaves prices vulnerable as liquidation pressures escalate.
Technical Analysis: Support and Resistance Dynamics
Bitcoin is currently navigating within a tightly monitored technical range. The immediate support zone has formed around the $73,500 level from 2024 and the February 3 intraday low of $72,945. Broader analysis by IG Markets identifies a more extensive support band ranging from $73,581 to $76,703—an area historically associated with prior cycle highs and 2025 lows that has undergone multiple tests over the past year.
A daily close below this critical band could precipitate further selling pressure toward the next support cluster situated between $72,757 and $71,725. Should that zone fail to hold firm, attention would turn toward the July 2024 peak at approximately $70,041 as the next significant downside waypoint.
Conversely, Bitcoin’s reclamation of its 2024 all-time high at $73,500 indicates that buyers are prepared to defend this recently breached level. The trough zone around $74,508 from April 2025 now serves as resistance after previously functioning as support. Additional minor resistance levels are positioned at $78,300, with more significant barriers residing at the November 2025 low of $80,620 and the psychologically significant threshold of $80,000.
Differentiating Between Temporary Rebounds and Sustained Recovery
A single-day rebound should not be misconstrued as indicative of a durable market bottom. Historical trends suggest that sustainable recoveries necessitate two key conditions: consistent daily closes above the $74,500 level—transforming the April 2025 reference zone from resistance to support—and tangible evidence demonstrating that liquidation pressures have subsided following the recent wave of forced selling exceeding $2.56 billion.
In the absence of these confirmations, any upward rallies may merely represent “dead-cat bounces” that encounter resistance from sellers utilizing strength to exit their positions. Furthermore, ETF flows must stabilize beyond isolated positive trading days to reflect a shift toward more aggressive institutional participation rather than mere tactical maneuvers.
Two Potential Near-Term Scenarios for Bitcoin
If Bitcoin manages to hold within the support zone ranging from $73,000 to $73,445 while reclaiming the pivotal level at $74,500, then the path of least resistance may incline towards gradual upward movement targeting $78,300 followed by the range between $80,000 and $80,620. This scenario necessitates both technical follow-through and an absence of new macroeconomic headwinds.
Conversely, a daily close beneath the lower boundary of $73,581 would heighten the likelihood of continued selling pressure into the range of $72,757 to $71,725. In this context, the critical psychological and technical waypoint at approximately $70,000 would emerge as the next focal point for market participants. This scenario becomes increasingly plausible if liquidation pressures remain elevated or if macroeconomic conditions deteriorate further.
The decline below its 2024 all-time high—after nearly one year of steadfast support—constitutes a significant technical breakdown that effectively shifts the burden of proof onto buyers. The interplay between macro risk-off sentiment, leverage unwinding phenomena, and tactical institutional flows has engendered circumstances wherein previously robust support levels were breached within an alarmingly short timeframe.
