Bitcoin Briefly Dips Below $61,000 Amid Intensifying Cryptocurrency Sell-Off
February 5, 2026 — Bitcoin experienced a significant drop on Thursday, briefly falling below the $61,000 mark as a wave of selling pressure shook the cryptocurrency market. The flagship digital currency, once praised as a "digital gold" and a reliable store of value, has been losing ground amid growing investor skepticism.
As of Thursday evening, Bitcoin’s price hit a low of $60,062 during overnight trading, before recovering slightly to around $62,448 by 7:37 p.m. ET, reflecting a steep 15% decline on the day. The cryptocurrency has been on a downward spiral this week, plunging nearly 30% in value.
Widening Crypto Sell-Off Reflects Investor Pessimism
The sharp decline comes in the context of more cautious sentiment towards cryptocurrencies, with traditional investors gradually stepping back. Deutsche Bank analyst Marion Laboure noted in a recent client briefing that ongoing selling momentum signals mounting pessimism about the crypto sector. Bitcoin’s failure to fulfill many of the lofty expectations attributed to it has contributed to this change in sentiment.
Originally hailed as a hedge against inflation and macroeconomic uncertainty, as well as an alternative to fiat currencies and traditional safe-haven assets like gold, Bitcoin has yet to prove consistent in these roles. Since peaking just above $126,000 in early October, Bitcoin’s value has eroded by more than half.
Technical Levels and Market Comparisons
On Thursday, Bitcoin broke through the $70,000 threshold—an important psychological and technical support level—which triggered further declines. Analysts highlight a critical range between $60,000 and $70,000 as a key focus, cautioning that falling below $70,000 may invite deeper losses. James Butterfill, head of research at Coinshares, described $70,000 as a "key psychological level" and warned that failure to hold it could make the $60,000 to $65,000 range the next target.
In comparison to gold, Bitcoin underperformed markedly. While Bitcoin dropped approximately 40% over the past year, gold futures increased by 61% during the same period. Ether, the second-largest cryptocurrency, also declined by about 33% this week, and other tokens like Solana reached near two-year lows, falling roughly 40% this week alone.
Broader Market Environment and Liquidations
The cryptocurrency downturn is unfolding alongside a broader sell-off in U.S. tech stocks, with technology-focused ETFs such as the State Street Technology Select Sector SPDR ETF (XLK) declining by 1.8% on Thursday, marking a third consecutive day of losses.
Volatility extends to precious metals as well, with silver oversold and gold experiencing downward pressure. Market stress in the crypto sector is further compounded by forced liquidations, where automatic sell-offs occur when prices breach set triggers. Data from Coinglass shows that more than $2 billion in long and short cryptocurrency positions were liquidated this week alone.
Shifts in Institutional Demand
Institutional investor interest, once seen as a stabilizing force in the cryptocurrency markets, is waning. CryptoQuant analysts reported a marked reversal in institutional demand, highlighting that U.S.-based exchange-traded funds (ETFs), which acquired 46,000 Bitcoin around this time last year, are now net sellers in 2026. Bitcoin has also fallen below its 365-day moving average for the first time since March 2022, declining 23% over the past 83 days — a performance worse than the early bear phase of 2022. Such setbacks suggest potential further downside toward the $60,000 to $70,000 range.
Looking Ahead
According to Maja Vujinovic, CEO of digital assets at FG Nexus, the earlier expectation of a "straight line bull run" has not materialized. She emphasizes that Bitcoin is no longer buoyed by hype but is instead trading primarily on liquidity and capital flows.
As market watchers continue to evaluate Bitcoin’s fundamentals amid geopolitical tensions and shifting investor appetites, volatility in the cryptocurrency space is expected to persist.
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