On February 4, 2026, Beijing time, the global cryptocurrency market suffered a violent correction. Bitcoin fell sharply during the session, with the largest intraday drop of about 8%, hitting a low of $72,900, falling below the key support level of $73,000, setting a new low in the past year since November 2024. According to statistics from market platforms such as CoinMarketCap, Bitcoin's cumulative decline has reached 15% since the beginning of 2026. Compared with the historical high of US$126,200 set in October 2025, the cumulative retracement has exceeded 42%, triggering overall turmoil in the crypto market and investor panic.
The plunge began during the midday session of the U.S. stock market. Bitcoin plunged rapidly from an intraday high of $79,100 in early Asian trading. In just a few hours, it fell below four integer levels of $78,000, 76,000, 75,000, and 73,000, reaching as low as $72,900. Its market value evaporated by more than $100 billion in a single day. The decline was quickly transmitted to the entire market. Ethereum simultaneously fell by more than 10%, falling below US$2,110; mainstream altcoins such as SOL and Dogecoin generally fell by more than 12%, and the total market value of cryptocurrencies shrank by more than US$110 billion in a single day.
The contract market suffered a "strangling" liquidation. According to statistics from the encrypted data platform Coinglass, within 24 hours of the plunge, more than 420,000 investors across the network were liquidated, with a total liquidation amount of US$2.56 billion. Among them, Bitcoin contract liquidations accounted for more than 65%. Highly leveraged long positions were liquidated in a concentrated manner, further exacerbating the downward spiral of prices.
This deep correction is not driven by a single factor, but is the result of the triple pressure of macro policies, institutional funds, and market leverage.
Spot ETF funds continued to experience net outflows. As the core channel for institutional entry, the U.S. Bitcoin spot ETF has recently experienced a continuous large-scale withdrawal of funds, with a net outflow of more than 1.4 billion US dollars in a single week. Custodians passively sold Bitcoin to realize cash, directly forming selling pressure; the stock prices of listed companies with heavy Bitcoin positions such as MicroStrategy have simultaneously and deeply corrected, exacerbating institutional risk aversion.
Stampede on highly leveraged contracts. Previously, the market was generally bullish, with the open interest of Bitcoin futures reaching a record high. A large number of investors used high leverage of 50 times and 100 times to pursue long positions. After the price broke, a series of forced liquidations were triggered, forming a negative feedback loop of "fall – liquidation – intensified selling pressure – continued decline".
In addition, the uncertainty of some crypto regulatory policies and the thin liquidity caused by thin trading in Asian markets during the holidays also amplified the amplitude of this fluctuation, allowing a small sell order to trigger a sharp drop in prices.
Bitcoin has previously been given the hedging and anti-inflation properties of "digital gold" by the market. This round of simultaneous sharp declines against the backdrop of the strengthening of the US dollar and the correction of risk assets has put this narrative under severe test. Many Wall Street institutions have lowered the short-term target price of Bitcoin. Goldman Sachs and Morgan Stanley have warned of the high volatility risk of crypto assets and recommended that investors reduce their allocation ratio.
Domestic crypto trading platforms and compliance service agencies simultaneously issued risk warnings, emphasizing that virtual currencies do not have the status of legal tender and are not protected by law, and reminded ordinary investors to stay away from leveraged trading and blind bargain hunting. Industry insiders pointed out that the current market has turned from early fanaticism to rational cooling, and Bitcoin prices have returned to fundamentals and capital drivers, and will still maintain a high volatility pattern in the short term.
At present, Bitcoin has briefly stabilized around US$73,000, and some bottom-hunting funds have entered the market to promote a slight rebound. However, the upper range of US$78,000-80,000 has formed a strong pressure level. Market analysts believe that the core of the subsequent trend depends on two major variables: First, whether the Fed's policy expectations have changed. If the interest rate cut timetable is clear, funds may return to the crypto market; second, whether the flow of Bitcoin spot ETF funds can turn from negative to positive, and the return of institutional funds is the key to stopping the decline and rebounding.
In the long term, the fundamental logic of the Bitcoin halving cycle and the implementation of blockchain technology applications has not changed, but the short-term liquidity tightening and deleveraging process will continue. The industry reminds that crypto assets are a high-risk investment category, and ordinary investors should strictly control their positions and stay away from leverage to avoid heavy losses due to extreme fluctuations.
As market deleveraging is gradually completed, Bitcoin may enter a stage of shock bottoming. Macroeconomic policy, global regulatory frameworks, and institutional capital trends will jointly determine the depth and duration of this round of bear market adjustment.
