Bitcoin briefly dipped below the $72,000 level during the latest wave of selling before staging a quick rebound back above $73,000, offering a short-lived sense of stability in an otherwise fragile market.
Key takeaways
Bitcoin briefly fell below $72,000 before quickly reclaiming the $73,000 level.
Extreme fear and heavy liquidations continue to dominate market sentiment.
Analysts are split between historical bottom signals and ongoing macro-driven downside risks.
Despite the bounce, sentiment remains deeply bearish, with Bitcoin still nursing losses of nearly 20% over the past seven days as volatility continues to dominate trading conditions.
The move below $72,000 triggered a fresh burst of liquidations across major exchanges, accelerating downside momentum before buyers stepped in. While the rebound suggests demand remains present at lower levels, the recovery has so far lacked strong follow-through, keeping traders cautious about the market’s near-term direction.
Market Structure Weakens Despite Short-Term Rebound
From a technical standpoint, Bitcoin’s broader structure remains under pressure. The recent drop broke through several key support zones on lower timeframes, reinforcing the prevailing downtrend even as price reclaimed $73,000. Elevated volume during the sell-off points to forced selling rather than controlled distribution, a pattern commonly seen during periods of heightened fear.
Still, some analysts argue that extreme conditions may be setting the stage for a potential turning point. Crypto analyst Michael van de Poppe highlighted that when Bitcoin is measured against the S&P 500, the weekly RSI is approaching the lowest levels ever recorded. Similar readings in 2015 and 2022 coincided with major bear market bottoms, suggesting the current environment could be closer to exhaustion than continuation.
If you value $BTC against the S&P, then we're also hitting the lowest RSI ever on the weekly timeframe.
The last times that we were remotely close was during the bottom in the bear market in 2022 and the bottom of the bear market in 2015.
We're very close. pic.twitter.com/SHcu7A7RN7
— Michaël van de Poppe (@CryptoMichNL) February 4, 2026
Institutions Warn Liquidity Risks Persist
Caution remains high among traditional financial players. Investment firm Stifel recently warned that Bitcoin could still face substantial downside if macro conditions fail to improve. The firm pointed to tight Federal Reserve policy, slowing progress on U.S. crypto regulation, declining liquidity, and continued ETF outflows as factors that could pressure prices further based on historical market cycles.
Sentiment indicators reflect this uncertainty. Market psychology has sunk into “extreme fear,” a level typically associated with declining participation from both retail and institutional investors. While such conditions have historically preceded sharp rebounds, they have also been known to persist longer than many expect.
Altcoins Lag as Risk-Off Mood Dominates
Altcoins remained under heavy pressure even as Bitcoin stabilized above $73,000. Ethereum, Solana, and XRP all posted sharp weekly losses, with Solana standing out as one of the weakest performers over the past 24 hours. The uneven recovery underscores a broader risk-off environment, where capital remains concentrated on defensive positioning rather than chasing rebounds.
For now, Bitcoin’s ability to hold above $73,000 may determine whether the market can consolidate or if renewed selling pushes prices back toward recent lows.
