Bitcoin extended its sharp decline for a second consecutive day on February 4, 2026, briefly sinking as low as $71,540 in Asian trading hours before recovering slightly to trade around $72,958 by late European session — still down approximately 4% on the day.

The cryptocurrency has now fallen more than 40% from its all-time high of $126,000 reached in October 2025, returning to levels last seen in the immediate aftermath of the U.S. presidential election in November 2024. The rapid erosion of post-election gains has intensified selling pressure and raised questions about the sustainability of Bitcoin’s earlier rally.

Key Levels Breached, $70,000 in Focus

Bitcoin’s breach of the $73,000 zone — a level that had previously acted as short-term support — has triggered a fresh wave of stop-loss orders and liquidations. Technical analysts now point to $70,000 as the next major psychological and structural support threshold. A decisive break below that level could open the path toward $65,000–$68,000, where longer-term moving averages and prior consolidation zones converge.

Futures market data shows elevated liquidation activity, with long positions continuing to be flushed out as leverage unwinds. The Crypto Fear & Greed Index remains deep in fear territory (readings below 25), reflecting widespread risk aversion.

Drivers of the Sell-Off

The renewed weakness aligns with a broader risk-off environment across global markets:

• Persistent uncertainty surrounding U.S. fiscal policy and the ongoing partial government shutdown
• Sticky inflation data that continues to reduce expectations for meaningful Federal Reserve rate cuts in the near term
• Renewed geopolitical tensions in multiple regions
• Sharp declines in technology stocks and growth-oriented equities, dragging high-beta assets including crypto lower

Analysts note that the initial post-election euphoria surrounding a pro-crypto U.S. administration has largely faded, replaced by the reality of macroeconomic headwinds and a lack of fresh positive catalysts.

‘Crisis of Faith’ in the Crypto Community?

Bloomberg described the current phase as a “crisis of faith” among traders, as the narrative of inevitable upward momentum following the 2024 U.S. election has been challenged by real-world economic pressures. Smaller altcoins and mid-cap tokens have suffered even steeper losses, amplifying the sense of sector-wide vulnerability.

Despite the gloom, several long-term observers maintain a more constructive outlook:

• The correction is viewed as healthy after the rapid gains seen in late 2025
• Improving regulatory clarity in the U.S. (including progress on market structure legislation) continues to develop
• Institutional adoption — via spot ETFs, corporate treasuries, and custody solutions — remains structurally supportive
• On-chain metrics show that long-term holders (“HODLers”) have largely refrained from selling, while large wallets continue to accumulate on dips

What Comes Next?

The near-term path will likely depend on:

• Upcoming U.S. economic data releases (PPI, CPI, employment figures)
• Any resolution or escalation of the government shutdown
• Spot Bitcoin ETF flow trends — whether institutional buying resumes or outflows persist
• Broader equity market behavior and risk sentiment

For now, Bitcoin remains in a defensive posture. While short-term traders face heightened liquidation risk and volatility, many long-term participants continue to frame the current drawdown as a necessary reset within a still-intact multi-year bull thesis — provided macro conditions eventually stabilize and regulatory tailwinds materialize.

Until clearer positive catalysts emerge, Bitcoin is likely to remain headline-sensitive and prone to sharp swings. The $70,000 level will serve as the critical battleground in the days and weeks ahead.