The cryptocurrency market has started this Tuesday, February 3, 2026, with significant relief following the intense selling pressure of the weekend. Bitcoin (BTC), which had touched dangerous lows near $75,000, has managed to rebound strongly, currently trading around $78,662. This movement has dragged Ethereum (ETH) with it, recovering the $2,322 level, and has sparked interest in specific Decentralized Finance (DeFi) sectors.
However, despite the green numbers in the last 24 hours, the overall atmosphere remains one of absolute caution. Institutional analysts warn that this movement could be a “bull trap” or a classic technical bounce, driven more by short position covering than by sustained organic demand. With the Fear and Greed Index marking “Extreme Fear” levels, the key question for investors is whether this floor at $75,000 will be durable.
KEY INSIGHT: The divergence between the price bounce and ‘Extreme Fear’ sentiment (17/100) suggests the market is in a phase of technical relief from overselling, not a structural trend change.
Market Context: Extreme Fear and the Fed’s Shadow
The macroeconomic environment continues to be the main headwind for risk assets in this early February 2026. The Fear & Greed Index has plummeted to a reading of 17, signaling a state of “Extreme Fear” among market participants. This level of pessimism had not been seen with such intensity since mid-2025 corrections.
Uncertainty comes largely from the United States. US dollar strength, driven by speculation about Federal Reserve leadership and the possibility that interest rates will remain restrictive for longer, has reduced risk appetite. Investors are still digesting the impact of recent inflation data, which has turned Bitcoin and altcoins into assets highly sensitive to global liquidity.
Despite this somber backdrop, the DeFi sector has shown surprising resilience today. According to market data, while the “majors” stabilize, protocols like Hyperliquid (HYPE) have recorded gains of 19.85%, and Morpho has advanced 9.10%, indicating that smart capital continues rotating toward protocols with solid fundamentals or real yield narratives.
Technical and Fundamental Analysis
From a technical perspective, Bitcoin’s movement in the last 24 hours is a textbook support defense. The $75,000 zone acted as a psychological and technical containment wall, where buyers intervened to prevent greater capitulation.
Vincent Liu, CIO of Kronos Research, has noted that this bounce primarily reflects “post-liquidation short covering and oversold conditions.” This implies that traders who bet on the downside are closing positions to secure profits, which mechanically pushes price upward, but does not guarantee that new long-term buyers are entering the market.
Below, we detail key verified movements in today’s session:
| Asset | Current Price | 24h Change | Key Level |
|---|---|---|---|
| Bitcoin (BTC) | $78,662 | +4.2% | Support defended at $75,000 |
| Ethereum (ETH) | $2,322 | +5.86% | Immediate resistance at $2,400 |
| Hyperliquid (HYPE) | – | +19.85% | DeFi bounce leader |
| Morpho | – | +9.10% | Strong capital inflow |
For Ethereum, recovery above $2,300 is vital. Having momentarily fallen toward $2,200 set off alarms, but the current 5.86% rebound gives it breathing room. However, the declining highs structure on the daily chart remains intact, and ETH needs to convincingly surpass $2,400 – $2,500 to invalidate the short-term bearish thesis.
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Get started nowImplications for Traders
For retail traders, this environment of “bounce within a bearish trend” is one of the most difficult to navigate. Volatility is high and the risk of false breakouts is elevated.
Key points to consider:
* Euphoria Management: Don’t confuse a 4-5% bounce with the start of a new bull market (bull run). The macro trend remains downward-pressured while BTC is below $80,000 – $82,000.
* DeFi Opportunities: The relative strength of tokens like HYPE and MORPHO suggests there is “alpha” in selecting specific altcoins, beyond simply buying BTC or ETH.
* Invalidation Levels: If Bitcoin loses the $75,000 support on a daily close, the probability of visiting $70,000 increases dramatically. That should be the mental “stop” level for tactical long positions.
* Dollar Watch: Keep an eye on the DXY index. Any dollar weakness could give additional fuel to this crypto bounce.
Short-Term Outlook
In the coming days, the market will seek to confirm whether the $75,000 floor is definitive or temporary. Analysts will be watching ETF flows and derivatives market data. If open interest begins to rise along with price, it could indicate genuine accumulation.
However, if volume decays as price approaches $80,000, we will likely see a new wave of selling. Caution is the dominant strategy: the market has demonstrated it can punish complacency quickly, and with sentiment at “Extreme Fear,” any negative macroeconomic news could trigger a new test of the lows.