The bitcoin price continued its significant downturn, following a prolonged decline that has wiped out over half of its value since its peak in October. Currently, bitcoin is trading around $66,000 after a sharp sell-off that drove prices close to $60,000. Since approximately December 2025, the bitcoin price has adhered to a clear downward trend, plummeting from heights exceeding $100,000 into a fluctuating range that has kept traders attentive to the question of whether the market has established a sustainable bottom. On February 5, Bitcoin’s price fell beneath the significant threshold of $70,000, igniting substantial selling activity in both spot and derivatives markets. The downturn has been fueled by macroeconomic uncertainty, institutional derisking, and volatility in technology stocks that frequently move in sync with crypto risk appetite. Following the recent sell-off, Bitcoin’s price has faced challenges in regaining its momentum, consistently hovering in the $66,000 to $67,000 range, with trading fluctuations between $66,000 and $72,000 becoming a frequent occurrence.
K33 asserted this week that the drop toward $60,000 could signify a local bottom, referencing what it termed as “capitulation-like conditions” in relation to volume, funding rates, options skews, and exchange-traded fund flows. Vetle Lunde highlighted a “vast list of extreme outliers” that accompanied the move, as reported. Trade volumes surged to the 95th percentile, as funding rates plummeted to lows reminiscent of the March 2023 U.S. banking crisis. Options skews have surged to levels reminiscent of the extreme stress witnessed during the 2022 bear market. Momentum indicators have also ventured into unusual territory. Following a continuous wave of selling that began on January 20, Bitcoin’s daily Relative Strength Index has plummeted to 15.9, marking one of the most oversold levels observed since 2015. The RSI, or Relative Strength Index, gauges the speed and magnitude of recent price fluctuations on a scale ranging from 0 to 100. Typically, values falling below 30 are interpreted as indicating an oversold condition. Lunde highlighted that past extremes in March 2020 and November 2018 aligned with significant cycle lows.
Sentiment gauges indicated a comparable level of strain. The Crypto Fear & Greed Index plummeted to 6 amid the sell-off, marking its second-lowest level ever recorded, highlighting the extent of negativity as Bitcoin neared the $60,000 mark. The price action unfolded amid what Lunde described as “hyperactive trading.” On February 6, the two-day spot volume hit an impressive $32 billion, marking one of the highest levels ever documented. On Feb. 5 and Feb. 6, the market experienced consecutive sessions hitting the 95th percentile in volume, a rare occurrence that has only been observed once before in the last five years, specifically during the FTX collapse. K33 noted that these outlier days frequently coincide with local price extremes, although consolidation and retests may ensue. The derivatives markets reflected the tension. On February 6, daily annualized funding rates in Bitcoin perpetual swaps plummeted to -15.46%, marking the lowest point since March 2023. Meanwhile, the seven-day average annualized funding rate decreased to -3.5%, its weakest level since September 2024. Options positioning has shifted into what Lunde referred to as “extreme defensive territory,” akin to the scenarios that unfolded during the Luna collapse, the 3AC unwind, and the FTX failure.
ETF activity experienced a significant surge. On February 5, BlackRock’s iShares Bitcoin Trust achieved a remarkable milestone, hitting its highest daily trading volume ever, exceeding $10 billion with 284.4 million shares exchanged. On the same day, it was noted as the fifth-largest daily outflow since the launch of spot Bitcoin ETFs, leading to net weekly outflows of 13,670 BTC, even with subsequent inflows later in the week. K33 indicated that the range of volatility, volume, yields, skews, and ETF flows collectively suggests that $60,000 stands as a high-probability bottom. The firm anticipates that the Bitcoin price will undergo an extended consolidation phase that could last for weeks or even months, likely fluctuating between $60,000 and $75,000. There are heightened chances of a retest of support, but expectations for significant further downside remain limited. Certain long-term industry figures have positioned the downturn as a chance for growth. Val Vavilov, co-founder of Bitfury and an early cryptocurrency adopter, stated that the recent market downturn presented an opportunity to rebalance and increase exposure.
“For us, the fall in Bitcoin is an opportunity to rebalance our portfolio and purchase a certain amount of Bitcoin at a low price,” he said, as reported, while noting Bitcoin remains only one component of a broader strategy that now includes artificial intelligence data centers. Technical analysts continue to zero in on crucial levels. Following the bounce back from $60,000, resistance is positioned around $71,800, while $74,500 marks a Fibonacci retracement level. Additional resistance is observed around $79,000 and $84,000. Bulls are keeping an eye on $65,650 and $63,000 as key near-term support levels, while $60,000 stands as the significant floor above the 0.618 Fibonacci retracement at $57,800, as reported by Bitcoin Magazine Pro data.