Published: 5 February 2026,07:01
Daily Market Analysis New
*Bitcoin and Ethereum have suffered heavy losses, with market capitalization plunging by around $600 billion, reflecting broad-based risk-off liquidation.
*The nomination of a hawkish Fed successor has strengthened the dollar and undermined speculative assets, compounding ETF outflows and weak sentiment.
*Key supports are under threat, with ETH at $2,000 and BTC potentially targeting $70,000, while any rebound is likely to face strong selling pressure.
The digital asset market is experiencing a severe and sustained downturn in late January, with bearish momentum accelerating across the board. Bitcoin has declined more than 20% since last Thursday, while Ethereum is perilously testing the critical $2,000 psychological support. The sell-off is broad-based, erasing approximately $600 billion from the total cryptocurrency market capitalization, which has slumped 20% to around $2.4 trillion from over $3 trillion just a week ago.
This downturn has been exacerbated by a fundamental shift in the macro landscape. The recent nomination of a hawkish candidate to succeed Jerome Powell as Federal Reserve Chair has significantly altered market expectations. The perceived reduction in long-term “dollar debasement” risk has strengthened the U.S. dollar and dealt a blow to speculative, non-yielding assets like cryptocurrencies. This macro headwind has overwhelmed the sector, which was already trading with fragile sentiment and a lack of positive catalysts, notably evidenced by persistent outflows from U.S. spot ETFs.
Given the firm and persistent selling pressure, the path of least resistance for major cryptocurrencies remains downward. Ethereum’s struggle at $2,000 is a key near-term focus; a decisive break below this level would signal a new phase of weakness. The critical question for the market is whether Bitcoin, having breached multiple supports, will now challenge the next major psychological fortress at $70,000. A break below this level would represent a catastrophic technical failure, likely triggering another wave of panic selling and deepening the crypto winter.
The market is in a clear risk-off capitulation phase driven by a hawkish Fed narrative. Technical support is failing, and sentiment is deteriorating rapidly. While both BTC and ETH are deeply oversold, which can prompt sharp but short-lived rallies, the fundamental backdrop suggests any bounce will likely be sold into until a durable macro catalyst emerges. The probability of Bitcoin testing $70,000 has increased substantially. Prudent strategy favors extreme caution, with a focus on capital preservation over attempting to catch a falling knife.
Technical Analysis
Bitcoin has sustained a significant technical breakdown, decisively breaching the critical support level near $74,800. This failure has triggered a swift decline of more than 5%, bringing the price to the precipice of the next major psychological and technical fortress at the $70,000 mark. A confirmed break below this level would represent a catastrophic failure of market structure, likely exacerbating the sell-off and triggering a new wave of capitulation selling toward significantly lower support zones.
The severity of the decline is underscored by bearish momentum indicators entering extreme territory. The Relative Strength Index has penetrated deeply into oversold levels, reflecting intense and persistent selling pressure. Concurrently, the Moving Average Convergence Divergence indicator has crossed below its zero line and exhibits clear bearish divergence, confirming that downward momentum is not only present but is accelerating.
Bitcoin is in a state of technical crisis following the breakdown below $74,800. The move toward $70,000 is a high-probability outcome given the current momentum. While the oversold RSI condition increases the potential for a vicious short-covering bounce, such rallies within powerful downtrends are often fleeting and present selling opportunities. The paramount focus is the market’s behavior at $70,000. A sustained break below would signal a profound loss of confidence and likely dictate a bearish trend for the medium term.
Resistance Levels: 74,450.00, 84,080.00
Support Levels: 61,880.00, 52,450.00
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