Analysts Warn of Risks of a Significant Bitcoin Price Decline

On February 4, Bitcoin sharply dropped to $70,000, continuing a negative trend that has already erased 44% of its all-time high set above $126,000 in October 2025. The sell-off intensified debates over whether the market is approaching a cyclical bottom or entering a deeper correction.

On February 4, Bitcoin sharply dropped to $70,000, continuing a negative trend that has already erased 44% of its all-time high set above $126,000 in October 2025. The sell-off intensified debates over whether the market is approaching a cyclical bottom or entering a deeper correction.

The sharp decline coincided with rising anxiety in traditional markets. U.S. stock indices showed weakness amid concerns about the impact of artificial intelligence and increasing geopolitical risks. This environment pushed investors away from risk assets.

Against this backdrop, capital began returning to traditional safe-haven assets such as gold and silver. Bitcoin, however, failed to attract investors seeking protection.

Bitcoin, gold, and silver chart over 5 days. Source: TradingView

Macro and geopolitical tensions boost demand for traditional safe havens

Bitcoin’s volatility remains closely tied to macroeconomic shifts and global market movements. The latest downturn coincided with renewed tensions between the United States and Iran. The trigger was news that an Iranian drone was allegedly shot down near a U.S. aircraft carrier.

As a result, the VIX volatility and fear index rose by around 10%, while the crypto Fear & Greed Index moved into the “extreme fear” zone.

Crypto Fear & Greed Index. Source: CoinMarketCap

At the same time, concerns within the artificial intelligence sector intensified again — particularly following new announcements related to Anthropic’s Claude chatbot — fueling fears of major structural shifts in the tech sector. This uncertainty weighed on key technology stocks and further reduced investor appetite for speculative assets.

While Bitcoin was falling, gold gained 6.8% and silver rose 10%, reinforcing their status as primary hedging instruments during periods of financial and geopolitical instability.

Speaking to CNN, Jerry O’Shea, Head of Market Research at Hashdex, noted that the divergence between Bitcoin and gold performance shows that investors still view precious metals as the primary safe haven during turbulent times.

Analysts warn of deeper downside and a potential bull trap

Market participants continue to debate the outlook, but several analysts openly state that the correction phase is not yet over.

Crypto analyst Benjamin Cowen believes the near-term outcome will be decisive for Bitcoin. He outlines two scenarios:

1. If $BTC rebounds soon. The market could get a few months of relief, potentially returning to autumn price levels without major drawdowns.

2. If $BTC fails to rebound. The year could be difficult, with continued pressure and weak performance.

Other analysts are more skeptical. Trader Nehal, followed by a large audience on X, believes the current structure resembles a classic bull trap and warns that the decline may only be halfway complete.

Referring to past cycles, Nehal notes that Bitcoin fell 86% in 2018 and 78% in 2021.

Bitcoin chart analysis and forecast by Nehal

If this model is extrapolated to the current cycle, the decline could reach 72%, pushing Bitcoin’s price toward $35,000.

Despite structural changes in the market — including ETFs and institutional participation — this perspective remains plausible.

On-chain data points to a market bottoming phase

On-chain indicators add further nuance to the discussion. Analyst CryptOpus notes that Bitcoin is entering a so-called bottom-finding phase for the first time in this cycle.

At the 2025 peak, around 19.8 million BTC were in profit. That number has now fallen to 11.1 million BTC, meaning the amount of coins in profit has dropped by 40%.

How the number of Bitcoins in profit has changed.

Historically, similar conditions often preceded a transition from correction to cycle restart. In 2018, Bitcoin remained in this phase for roughly eight months before stabilizing.

Market focus remains on key levels

From a technical perspective, downside risks remain evident. Nick, Head of Coin Bureau, emphasizes that pressure on Bitcoin has persisted since it fell below the 50-week moving average.

Bitcoin is currently trading near MicroStrategy’s average acquisition price and close to the April lows around $74,400.

“If the price breaks lower, the next key level is $70,000, just above the previous all-time high of $69,000. A clean break below this level would open the path toward a bearish target of $55,700–$58,200 — between the realized price and the 200-week moving average,” Nick warns.

Bitcoin chart analysis by Nick.

Analysts remain divided on how close the market is to a bottom

Not all analysts agree with the bearish outlook. Michaël van de Poppe believes Bitcoin is already close to completing its correction.

Analyst David Battaglia focused on liquidation mechanics and described current market behavior as irrational. According to him, significant liquidity gaps exist below $85,000, indicating panic selling by institutional players or large holders at unfavorable prices. He compared the situation to the October 10 Binance-related crash.

“In the $90,000–$100,000 range, there is a high concentration of short positions and a put/call options imbalance of 14:1. Even under normal conditions, this signal typically points to the formation of a strong bottom,” Battaglia stated.

Conclusion

Bitcoin’s drop to $73,000 has once again intensified fears of a deep correction. Global instability, geopolitics, and mixed on-chain indicators have split the market: some expect further downside, while others see early signs of a bottom forming.

Editor: Pereyidenko Ihor

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