The cryptocurrency market is currently undergoing a severe correction inย February 2026, withย Bitcoin (BTC)ย and major altcoins suffering significant losses from theirย October 2025ย peaks. As ofย February 7, 2026, the market is in a state of "Extreme Fear," having lost approximatelyย $2 trillionย in total capitalization since the downturn began.ย
Bitcoinย recently touched a low nearย $60,000ย onย February 6, marking its weakest performance since late 2024.ย Ethereum (ETH)ย has underperformed further, sliding overย 29%ย in the past seven days to trade aroundย $1,940. This broad sell-off has triggered massive liquidations, with overย $2.5 billionย wiped out across the network in a single 24-hour period earlier this week.ย
Key Drivers of the Correction
Macroeconomic Pressure:ย Concerns over a "hawkish" Federal Reserve have intensified following the nomination ofย Kevin Warshย as Fed Chairman, leading to expectations of tighter monetary policy and higher interest rates.
Institutional Outflows:ย Spot Bitcoin ETFs recorded overย $1.6 billionย in net outflows in January, indicating that institutional investors are reducing exposure or locking in profits.
Technical Breakdowns:ย Bitcoin falling below key support levels, including theย $80,000ย psychological barrier andย MicroStrategy's average holding costย (approx.ย $76,037), triggered automated sell-offs and cascading liquidations.
Regulatory Headwinds:ย Renewed uncertainty from theย U.S. SECย and fresh restrictions inย Chinaย regarding yuan-pegged stablecoins have dampened global sentiment.ย
Market Outlook
Analysts suggest the market is in a "rebound from oversold" state, though the underlying bearish pattern remains intact. Whileย Bitcoinย has seen a tentative recovery towardย $69,000ย as of today, theย $58,000โ$60,000ย band is viewed as the next critical support region to prevent a more prolonged "crypto winter".ย
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