The crypto market has entered a phase of extreme fear after Bitcoin (BTC) plunged to the $60,000 level. Although BTC$BTC showed a modest rebound on Friday, February 6, 2026, market sentiment remains overwhelmingly bearish, with traders expecting further downside in the near term.
According to CoinMarketCap, the Fear & Greed Index has collapsed to 5 out of 100, marking its lowest reading in over three years. This sharp decline in sentiment has been accompanied by aggressive market liquidations. Over the past 24 hours alone, more than 580,000 traders were liquidated, resulting in losses exceeding $2.5 billion, the majority coming from long positions.
Traders Brace for Further Capitulation
Data from Santiment indicates that social media sentiment is heavily skewed toward expectations of another sell-off. Most market participants are discussing lower price targets, signaling a lack of confidence in the current rebound.
Adding to the bearish outlook, the Kalshi prediction market is pricing in nearly a 90% probability that Bitcoin$BTC could fall below $60,000 again. Santiment also notes that mentions of “lower” and “below” are significantly outpacing “higher” and “above” across crypto-related platforms.
Santiment warns that the recent price bounce may be nothing more than a dead-cat bounce. Historically, when the broader crypto crowd remains bearish during a rebound, price action tends to stay volatile. If sentiment suddenly turns optimistic too quickly, it could even trigger another wave of capitulation.
Is Bitcoin Approaching a Market Bottom?
Liquidity inflows into the crypto market have remained weak over recent months, especially as capital has flowed aggressively into precious metals such as gold and silver. This shift has intensified selling pressure, overwhelming existing buyers across global markets.
From a macro perspective, Bitcoin appears to be trading within a broader bear market structure, similar to conditions seen after the 2021 bull cycle. Supporting this view, CryptoQuant’s Market Cycle Signals suggest that BTC may be approaching an accumulation zone near $54,600, a level where long-term buyers historically begin to step in.
Regulatory uncertainty in the United States has also slowed institutional adoption, further weighing on market confidence and delaying large-scale capital inflows.
The Bigger Picture for Bitcoin
Unlike gold and silver, which have recently experienced parabolic rallies, the crypto market has struggled to gain momentum. On-chain data from Santiment reveals that Bitcoin whales have been reducing exposure, while smaller wallet holders continue to accumulate gradually.
This divergence has prevented BTC$BTC from sustaining bullish momentum over the past few months. However, it also suggests a potential shift in market structure, where supply is slowly moving into stronger hands.
Despite current bearish conditions, Bitcoin’s long-term fundamentals remain intact. The market has built significant structural support over the past few years, which could eventually fuel a V-shaped recovery. Additionally, a future rotation of capital from precious metals into Bitcoin—supported by a more favora
ble regulatory environment—could reignite bullish momentum.