Introduction

Recently, the cryptocurrency market has experienced severe fluctuations. Bitcoin (BTC) has fallen from its peak of $126,000 in October 2025 to around $74,000 in early February 2026, triggering panic in the market. Meanwhile, the precious metals market has also been hit hard: the price of gold has dropped from a high of $5,600 per ounce to $4,400 per ounce, and silver has plummeted from $121 per ounce to $71 per ounce, but then quickly rebounded, with gold rising to $4,900 per ounce and silver to $85 per ounce. This pattern of "sharp declines followed by violent rebounds" is evident in precious metals, while the Bitcoin market remains sluggish. Is the next step for the crypto circle a "desperate rebound" or a "continued decline"? This article will conduct an in-depth analysis from multiple perspectives, including macroeconomics, geopolitics, technical analysis, and fundamentals, to explore potential trends.

Analysis of the reasons behind Bitcoin's plunge

Bitcoin's plunge is not an isolated event but a result of compounded macro factors. Firstly, U.S. President Trump nominated Kevin Warsh as the chairman of the Federal Reserve, which the market interpreted as a 'hawkish' signal. Warsh emphasized monetary discipline and high interest rate policies, leading investors to expect that the Federal Reserve would maintain high interest rates, strengthening the dollar index. In a high interest rate environment, the appeal of risk assets like cryptocurrencies diminishes, directing funds toward safer assets.

Secondly, geopolitical risks are escalating. The tension between the U.S. and Iran has triggered risk-averse sentiments among investors, but Bitcoin has failed to act as 'digital gold,' instead declining alongside risk assets. Furthermore, there has been a massive outflow from U.S. Bitcoin spot ETFs, with nearly $1.5 billion net outflow last week, and Ether ETF outflows of $327 million, reflecting a reduction in holdings by institutional investors amid macro uncertainty.

Liquidity issues further amplify volatility. Low liquidity over the weekend led to a 'flash crash,' with leveraged trading liquidations reaching $500 million, primarily affecting long positions. From a technical perspective, Bitcoin formed a 'death cross' (50-day moving average crossing below the 200-day moving average), confirming bear market signals, with prices accelerating downwards from below $90,000. Currently, BTC has fallen below the $80,000 support, testing the $74,000 mark.

Insights from the plunge and violent rebound of precious metals

The movements in the precious metals market are highly similar to Bitcoin but rebounded first. Gold and silver recorded historic single-day declines last Friday: gold fell by 9-10%, and silver plummeted by 31%, marking the worst since 1980. The reasons stem from the strengthening dollar and interest rate expectations: after Warsh's nomination, the dollar rebounded from a four-year low, putting pressure on precious metals as dollar-denominated assets. Additionally, the global tariff war and government shutdown heightened recession fears, prompting investors to sell risk assets.

However, precious metals rebounded quickly: on Monday, gold rose by 5.5% to $4,913, and silver rose by 11% to $85. This is attributed to several factors: first, a repositioning after extreme sell-offs led to long positions being covered; second, the safe-haven properties of precious metals regained favor amid geopolitical tensions; third, exchanges raised margin requirements to curb further volatility. Analysts believe this rebound is not a turning point but a short-term correction, with long-term drivers (such as inflation and geopolitical risks) still in play.

Compared to Bitcoin, the rebound of precious metals shows greater resilience. Bitcoin, as a 'risk asset,' is more susceptible to stock market and liquidity influences, while precious metals benefit from physical demand and central bank reserves (like purchases from China and India).

Analysis of the correlation between Bitcoin and precious metals

The common trigger for the plummeting of both is the macro environment: a strong dollar, high interest rate expectations, and geopolitical risks. Bitcoin was once seen as 'digital gold,' but in this event, the correlation weakened: while gold rebounded, BTC lingered at low levels. This reflects that Bitcoin relies more on leverage and speculation, while precious metals have more stable fundamentals.

Historically, during the 2022 bear market, the correlation coefficient between BTC and gold once reached as high as 0.8, but fell to around 0.4 in 2025-2026. If precious metals continue to rebound, it may provide psychological support for BTC, but if the dollar remains strong, the correlation may further decouple.

Next steps for the crypto market: Dramatic rebound or continued decline?

Arguments for rebound

Technical support: $74,000 is a key support level, close to the shutdown price for miners ($69,000-74,000). If it falls below, it may trigger miner sell-offs, but it has currently rebounded to $78,000. The RSI indicator is oversold (14-day RSI<30), indicating short-term rebound potential, targeting $80,000-85,000.

Fundamentals improving: ETF outflows are slowing, and if the Federal Reserve softens its policy, funds may flow back. In the 2026 forecast, optimists like Youwei Yang expect a peak of $225,000. Discussions on platform X show some traders see $74k as a 'bottom,' anticipating a 'dramatic rebound.'

Macro turning point: If geopolitical risks ease or the dollar pulls back (such as improvements in Chinese data), risk assets may rebound. The violent rebound of precious metals may signal a similar pattern.

Arguments for further decline

Bear market confirmed: Death cross and bear flag patterns point to further declines, targeting $60,000-68,000. Analysts like Alex Thorn warn of a possible test of $56,000-58,000.

Miner pressure: If it falls below $74,000, mid-sized mining machines (like S21) will incur losses, triggering a wave of sell-offs.

Macro risks: Persistent high interest rates, government shutdowns, and global recession fears will suppress rebounds. The average forecast for 2026 is $110,000, but the lower end is only $75,000. Some opinions on X suggest that more long positions need to be liquidated first.

Overall, in the short term (2-4 weeks), a technical rebound to $80,000-85,000 may occur, but if macro conditions do not improve, the mid-term downside risk is higher, with a potential bottom at $65,000. In the long term, BTC may fluctuate between $75,000-150,000 in 2026.

Conclusion

Bitcoin's plunge to $74,000 starkly contrasts with the 'plunge and rebound' pattern of precious metals, highlighting the higher speculative nature of the crypto market. The next steps for the crypto market depend on macro turning points: if the dollar pulls back and risks ease, a 'dramatic rebound' is possible; otherwise, it may continue to test the $60,000 range. Investors should pay attention to the Federal Reserve's dynamics, ETF liquidity, and technical support to diversify risks. The market is unpredictable, and decisions should be based on data rather than emotions.