After consolidating sideways between $70,000-$72,000, Bitcoin’s price broke below the former psychological support once again and stabilised near $68,000. 

As a result of this, a significant number of long positions were liquidated later in the day, which had once again shifted the short-term narrative from a potential breakout to a defensive posture.

The total crypto market cap continued shedding value over the past day after recovering some of the losses that occurred late Thursday when Bitcoin price saw one of its largest intraday losses.

At the time of writing, it was hovering around the $2.4 trillion mark as investors remained hesitant, with the prevailing market sentiment dampened by macroeconomic uncertainty and a lack of fresh catalysts. 

The Crypto Fear and Greed Index showed little improvement but remained pinned within the extreme fear territory with a reading of 9, which it has been trading in for several consecutive sessions.

This level of sustained pessimism often precedes a “bottoming out” phase, but for now, buyers remain cautious of further downside.

Bitcoin saw a significant recovery attempt during the early hours of February 9, 2026, climbing back toward the $71,000 level. 

The early-day optimism was largely driven by a massive relief rally in Japanese markets following a landslide victory for Prime Minister Sanae Takaichi’s Liberal Democratic Party, which secured a two-thirds supermajority in snap elections.

The outcome was viewed as a strong mandate for market-friendly policies and economic stability in Asia’s second-largest economy, causing the Nikkei 225 to jump nearly 5% to a new record. 

Risk appetite also spilt over into the crypto markets, as traders initially interpreted the political stability in Japan as a positive signal for global liquidity and digital asset adoption.

Adding to the bullish momentum earlier in the day were reports of $221 million in net inflows into US Bitcoin ETFs on the preceding Friday, suggesting that institutional buy-the-dip interest was still active despite recent volatility.

Market sentiment was also bolstered by technical indicators showing Bitcoin in deeply oversold territory after its worst week since the FTX collapse. 

This led to a short-term short squeeze, with analysts noting that investors were eager to reclaim the $70,000 psychological barrier as a sign that the correction from the October 2025 highs of $126,000 had finally bottomed out.

However, the rally proved to be a “dead cat bounce” as the price hit heavy resistance and tumbled toward the $68,000 mark later in the day.

The primary catalyst for the reversal was a sharp resurgence in gold prices, which reclaimed the $5,000 per ounce level. 

As gold strengthened, it sucked liquidity out of the crypto market, reasserting its status as the preferred safe haven and leaving Bitcoin to trade more like a high-risk tech stock than a hedge against debasement.

Meanwhile, a 7.5% drop in US software stocks and broader concerns about an artificial intelligence bubble triggered a risk-off sentiment that hit speculative assets the hardest.

The decline intensified as the Japanese yen strengthened against the dollar following the election results, creating a headwind for dollar-denominated assets.

By the late Asian trading hours, the initial euphoria had faded into a broader deleveraging event.

Liquidations of overleveraged long positions accelerated the slide, as traders who had bet on a sustained breakout above $72,000 were forced to sell. 

With the Crypto Fear and Greed Index stuck in extreme fear territory at a reading of 9, the lack of follow-through buying confirmed that the market remains in a state of high caution, with investors more focused on macroeconomic threats like changing Fed balance sheet policies, specifically the uncertainty surrounding the nomination of Kevin Warsh and his potential to pivot back toward aggressive quantitative tightening and reserve drains.

According to data from Coinglass, nearly $165 million had been liquidated over the past 12 hours, with over $114 million coming in the form of long liquidations later in the day

By Feb 10, Bitcoin had dipped to an intraday low of $68,427 before recovering to $68,719 with losses of nearly 2.3% at press time.

Despite the recent market volatility, many large institutions, the likes of BlackRock, Binance, and MicroStrategy, among the primary accumulators, were seen buying the dip alongside the return of inflows late last week and significant whale buying on decentralised exchanges.

This means bullish conviction remains high over Bitcoin’s long-term, but in the short term, across the market, analysts were divided about the sustainability of the current support.

For instance, recent analysis from Citi Research strategist Alex Saunders suggested that Bitcoin price remains at risk as long as it is trading below $70,000, which he identified as a critical psychological and “pre-election” price level for Bitcoin.

Saunders has also highlighted that $81,600 was the estimated average entry price for spot ETFs, suggesting that the majority of institutional holders are currently underwater, which could trigger further sell-side pressure if the price doesn’t recover quickly.

On a similar note, analysts at IG Group pointed towards the $81,000 mark, which they said must be recaptured on a daily closing basis to confirm a trend reversal and shift the medium-term outlook from bearish back to neutral.

On X, well-followed market analyst Ted Pillows pointed to two major liquidation clusters, one around the $72,000–$80,000 range and another near the $67,000 level, that had formed over recent trading sessions, which the analyst suggested were slightly skewed in favor of the upside.

“In the short term, it looks like bears could be in trouble,” Pillows wrote.

$BTC will bottom between $39K – $53K. Here’s why.

Others like trader and analyst Ruz, were looking forward to more downside, with a possible Bitcoin bottom between $39K – $53K.

Meanwhile, crypto commentator and influencer The Cryptomist speculated that more sideways action could be on the table, in line with historical price behavior where Bitcoin consolidated for weeks before eventually breaking decisively in either direction.

The post Bitcoin stuck below $70K after failed rebound as analysts warn of losses appeared first on Invezz

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