The Crypto Market Is Falling and Investor Fear Is Rising: What’s Next

On Friday, February 6, Bitcoin fell to its lowest level since U.S. President Donald Trump returned to the White House. Politics continues to influence crypto investor sentiment, but it is no longer the only factor. Uncertainty is so high that investors prefer to sell digital assets.

On Friday, February 6, Bitcoin fell to its lowest level since U.S. President Donald Trump returned to the White House. Politics continues to influence crypto investor sentiment, but it is no longer the only factor. Uncertainty is so high that investors prefer to sell digital assets.

Bitcoin

From January 30 to February 6, 2026, Bitcoin lost 17.23% of its value. $BTC fell below $70,000 for the first time since November 2024. At the weekly low, the largest cryptocurrency by market capitalization traded even below $60,000.

Source: TradingView

One of the reasons for the Bitcoin sell-off was mass liquidation of long positions. Over the past seven days, more than $2.6 billion in leveraged long trades were forcibly closed. At the same time, liquidation of short positions was five times lower — $521.8 million. The worst day for buyers was Thursday, February 5, when long positions totaling more than $1 billion were liquidated.

Source: Coinglass

Bitcoin also lacks support from exchange-traded funds. Outflows from spot BTC ETFs have been recorded for the third consecutive week. This time, outflows reached $689.22 million, slightly lower than the previous two weeks, when outflows exceeded $1.3 billion each time. The largest outflow — $346.76 million — came from BlackRock iShares Bitcoin Trust (IBIT).

Source: SoSoValue

The political factor cannot be ignored. On Monday, February 2, a meeting between crypto market participants and bankers regarding the CLARITY bill was held at the White House but ended unsuccessfully. The bill did not move forward, meaning the conflict between banks and stablecoin platforms persists.

In addition, the U.S. issued a new advisory urging its citizens to leave Iran — the second such warning this year. Timing is crucial: the advisory came just ahead of U.S.–Iran talks on the Islamic Republic’s nuclear program scheduled in Oman on February 6. The news further increased crypto investor anxiety.

From a technical analysis perspective, Bitcoin remains in a downtrend. The price of $BTC is well below its 50-week moving average (marked in blue), suggesting a prolonged correction. The RSI has entered oversold territory (below 30), which could be interpreted as a positive signal for buyers. However, in a declining market, this oscillator can remain at low levels for an extended period. Bitcoin currently has a high probability of falling toward the support level around $50,000, while resistance stands at $74,000.

Source: TradingView

The Fear and Greed Index fell by 7 points compared to last week and currently stands at 9, indicating extreme fear among crypto investors.

Ethereum

Ether fell by nearly 25% from January 30 to February 6. Five of the seven trading sessions ended in the red for $ETH. Ether dropped to the $2,000 level. The second-largest cryptocurrency by market capitalization last traded lower on May 8, 2025.

Source: TradingView

An interesting pattern was noted by CryptoQuant analyst CryptoOnchain. He highlighted the metric tracking the total number of daily Ether transfers. The metric peaked at 1.66 million on January 16, while the 14-day simple moving average peaked later, on January 29, at 1.17 million. Although these figures may appear to indicate rising network activity, CryptoOnchain reached a different conclusion.

In January 2018 and May 2021, similar spikes in Ether transfers were observed, followed by sharp declines in $ETH price.

CryptoOnchain concludes that a sharp increase in Ether transfers indicates two things: long-term investors moving funds to exchanges to take profits, and a peak in price volatility. The CryptoQuant analyst believes a prolonged decline in February 2026 is quite possible and urges investors to exercise extreme caution.

As with spot Bitcoin ETFs, spot Ethereum ETFs also recorded outflows for the third consecutive week. This time, however, the outflow was the smallest — $149.07 million. The largest outflow came from BlackRock iShares Ethereum Trust (ETHA) — $106.72 million, accounting for more than 70% of the total weekly outflow.

Source: SoSoValue

Among other $ETH news, it is worth noting the launch on February 4 of Fidelity’s stablecoin FIDD on the Ethereum blockchain. The move is expected to intensify competition in the stablecoin market. Kraken became the first major centralized crypto exchange (CEX) to list FIDD.

From a technical standpoint, Ethereum’s trend is bearish. This is confirmed by the price trading below the 50-day moving average (marked in blue). The trend is strengthening as the ADX indicator rises. The $2,112 level, which long served as support, has now become resistance. The new support level is $1,750, from which price began rising in May 2025.

Source: TradingView

Solana

From January 30 to February 6, Solana declined by 27.91%. $SOL fell below $85 for the first time in two years. The weekly low stood at $66.76. The price drop was accompanied by increased volatility and trading volume.

Source: TradingView

Beyond the broader crypto market downturn, Solana was also negatively affected by new actions taken by Chinese authorities. The People’s Bank of China, together with seven ministries, issued a circular declaring all activities related to virtual assets illegal. This includes crypto exchanges, trading, intermediary services, token issuance, and related financial products. Tokenized real-world assets (RWA) were also explicitly banned — a particularly negative development for Solana, which is among the top three networks for RWA tokenization.

Spot $SOL ETFs showed modest but positive inflows totaling $2.94 million for the week. The best-performing product was Fidelity Solana Fund ETF (FSOL) with $5.19 million in inflows. The worst performer was Grayscale Solana Trust (GSOL), which saw outflows of $5.22 million.

Source: SoSoValue

Despite the price decline, Solana Foundation, the nonprofit organization behind Solana, signed an agreement with South Korean investment firm DB Securities. Together they will develop a digital capital market based on tokenized securities, both in South Korea and globally.

From a technical perspective, Solana remains in a downtrend. This is supported by the price trading below the 50-day moving average (marked in blue) and a negative Momentum indicator. The nearest support and resistance levels on the daily chart are $66.76 and $95.35, respectively.

Source: TradingView

Conclusion

The crypto market experienced its strongest correction this week. Bitcoin and major altcoins fell to multi-month lows. Outflows from spot ETFs, investor anxiety, and an increase in forced liquidations triggered widespread sell-offs.

Editor: Yuliya Soroka

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