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The crypto market has entered a phase of extreme fear after Bitcoin (BTC) briefly capitulated to the $60,000 level. While $BTC attempted a mild rebound on Friday, February 6, 2026, sentiment across the market remains deeply pessimistic.
According to CoinMarketCap, the Fear & Greed Index plunged to 5/100, marking its lowest level in over three years. This kind of reading historically signals panic rather than rational decision-making. At the same time, more than 580,000 traders were liquidated, wiping out over $2.5 billion in positions within 24 hours — with long traders taking the majority of the hit.
Despite the bounce, the crowd is still betting against Bitcoin.
Crowd Expects More Pain Ahead
On-chain and sentiment data from Santiment shows that the majority of crypto discussions on social media are calling for further downside in the coming days. Terms like “lower” and “below” are overwhelmingly outpacing “higher” and “above”, a classic sign of bearish crowd psychology.
Prediction markets back this up. Kalshi currently prices a 90% probability that Bitcoin will trade below $60,000, reinforcing expectations of continued capitulation.
Santiment warns that the current rebound could be a dead-cat bounce — a temporary relief move within a broader bearish structure. Historically, when the crowd remains bearish during a bounce, price can continue higher. However, if sentiment flips bullish too quickly, it often triggers another leg down.
Liquidity Drying Up as BTC Nears Accumulation Zone
Liquidity inflows into crypto have been weak in recent months, especially as capital chased a parabolic rally in precious metals like Gold and Silver. With buyers thinning out, sellers have dominated price action.
From a macro perspective, Bitcoin is already trading within a bear-market structure, similar to the post-2021 cycle. According to CryptoQuant’s Market Cycle Signals, $BTC is approaching its historical accumulation range, estimated around $54,600.
This zone has previously marked areas where long-term investors quietly step in while fear peaks.
Whales Capitulate While Retail Accumulates
On-chain data paints an interesting divergence. Large wallets (whales) have been reducing exposure, contributing to downside pressure, while smaller holders continue accumulating. This imbalance has prevented Bitcoin from sustaining bullish momentum over the past few months.
Historically, this transfer of supply from weak hands to strong hands often precedes major trend reversals — but only after volatility shakes out excess leverage.
The Bigger Picture
While crypto failed to follow precious metals in their recent parabolic move, the fundamental backdrop for Bitcoin has quietly improved:
Stronger on-chain infrastructure
Maturing institutional frameworks
Slowing regulatory hostility in key regions
Potential future capital rotation back from metals into $BTC
These factors support the possibility of a V-shaped recovery once liquidity returns and sentiment resets.
For now, Bitcoin remains volatile, sentiment is crushed, and fear dominates headlines — conditions that historically precede accumulation, not long-term tops.
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