It has been a rough morning for the crypto market. As of February 5, 2026, Bitcoin has indeed broken through several key support levels, and while it's currently fluctuating around the $72,000 to $73,000 range, it did dip lower during the recent sell-off.
The "Fear & Greed Index" has bottomed out at a 12 (Extreme Fear), signaling that panic is in the air. Here is a breakdown of why things are sliding:
Why is BTC falling?
The "Warsh" Effect: The nomination of Kevin Warsh to lead the Federal Reserve has triggered a massive shift in market expectations. Wall Street is bracing for a "monetary shutdown" (higher interest rates for longer), which has strengthened the US Dollar and crushed risk assets like
$BTC .
Institutional Exit: We’re seeing a massive "hemorrhaging" of capital. US-listed spot Bitcoin ETFs have seen nearly $3 billion in outflows over the last two weeks. When the big money leaves, the floor drops.
The Liquidation Loop: Since early February, over $660 million in long positions have been wiped out. As the price hits stop-losses, it triggers more automatic selling, creating a "waterfall" effect.
Geopolitical Jitters: Tensions between the US and Iran have spiked. Usually, Bitcoin fans call it "digital gold," but right now, investors are treating it like a high-risk tech stock and selling it to get cash (liquidity) instead.
The Bigger Picture
Bitcoin is currently about 40% down from its all-time high of ~$126,000 (hit back in October 2025). Even Michael Saylor’s Strategy is feeling the heat, as the current price is now below their average acquisition cost of roughly $76,000.
Is there a silver lining? Historically, February has been a "rebound" month. While the current sentiment is bleak, some analysts are watching the $70,000 mark as the "ultimate" support. If that holds, the "dip buyers" might finally step back in.
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