The cryptocurrency market faces today, Thursday, February 5, 2026, one of its most critical sessions of the year. Following the brief rally observed earlier in the week, Bitcoin (BTC) has suffered a violent bearish reversal, losing fundamental psychological and technical support levels. The leading cryptocurrency has fallen more than 4% in the last 24 hours, trading around $73,332, according to the CoinDesk price index, and reaching session lows of $70,052 during Asian trading.
This movement invalidates the recovery thesis that many analysts held following Tuesday’s bounce to $78,500. Selling pressure has been exacerbated by a lethal combination of fundamental factors: confirmation of a stricter monetary stance in the US and visible institutional capitulation in exchange-traded products (ETFs).
KEY INSIGHT: The loss of the $75,000 level and acceleration of ETF outflows suggest that “smart money” is reducing risk exposure ahead of the imminent Fed balance sheet contraction.
Market Context: Fear of a Hawkish Fed
The macroeconomic catalyst behind this new wave of selling is the growing certainty about the policies that Kevin Warsh, the nominee to chair the Federal Reserve, will implement. Markets have reacted negatively to expectations that Warsh will prioritize aggressive Fed balance sheet reduction (Quantitative Tightening), which has historically drained liquidity from risk assets like cryptocurrencies.
According to Julius Baer analysts, the market fears that a smaller balance sheet will eliminate the tailwinds that sustained the 2025 rally. “The market fears a hawk,” they noted, indicating that liquidity, the oxygen of crypto markets, could become scarce short-term.
In parallel, institutional investment data is alarming. Net capital outflows from spot Bitcoin ETFs have been recorded worth more than $2.9 billion in the last 12 trading days. This massive disinvestment trend sharply contrasts with the record inflows seen during the October 2025 peak, when Bitcoin reached its all-time high of $126,085.
Technical and Fundamental Analysis
Bitcoin’s technical structure has deteriorated significantly. By losing the $75,000 support, price has entered a bearish price discovery zone. On-chain indicators show an increase in Bitcoin reserves on exchanges, with an additional 137,000 BTC entering platforms since early February, a classic signal that investors are preparing to sell.
The impact is not limited to Bitcoin; Ethereum (ETH) has followed the trend with a decline close to 2%, trading at $2,086, its lowest level since May last year. ETH’s weakness is even more pronounced due to its higher beta relative to overall market sentiment.
Below, we detail key levels and impact on main affected pairs today:
| Pair | Current Price (approx.) | Intraday Trend | Critical Level to Watch |
|---|---|---|---|
| BTC/USD | $73,332 | Very Bearish | $70,000 (Psychological Support) |
| ETH/USD | $2,086 | Bearish | $2,000 (Structural Support) |
The derivatives market is also emitting warning signals. Bitcoin’s 30-day options skew has reached 13%, well above the neutral 6% level, indicating spiking demand for protective put options. This suggests that sophisticated traders do not see the bottom at $72,100 and are positioning for additional declines.
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Get started nowImplications for Traders
For retail operators, the current situation demands extreme caution. Volatility is high and order book liquidity is shrinking, which can cause significant slippage in executions.
Key points to consider:
* Watch $70k support: A daily close below $70,000 could trigger a cascade of liquidations pushing price toward the $50,000 zone, according to technical analyst projections.
* ETH Risk Management: With Ethereum close to losing $2,000, long altcoin positions are extremely risky. Correlation with BTC is almost total right now.
* Monitor ETF Flows: Today’s ETF closing data will be crucial. If outflows again exceed recent averages, selling pressure will continue tomorrow.
* Avoid Catching a Falling Knife: Although RSI may indicate oversold conditions, the strength of the bearish trend and institutional outflow volume suggest the bottom has not yet formed.
Short-Term Outlook
The narrative for the coming days will be dominated by defense of the $70,000 level. If bulls manage to defend this zone, we could see sideways consolidation while the market digests Fed news. However, market structure remains fragile. With Bitcoin’s price index falling 41.93% from its October high, the market is technically in deep bearish territory.
The absence of immediate positive catalysts and the adverse macroeconomic environment suggest that any bounce could be used by institutions to offload more positions. Investors should be attentive to additional statements from Kevin Warsh and inflation data that could confirm or ease fears of excessive monetary tightening.