Points of Focus  

• Bitcoin plunged to $60,000 overnight before recovering to ~$64,000, a 17% drop in 24 hours.  
• $817M in liquidations in the last four hours; $2.67B total in 24 hours, mostly longs.  
• 44% of BTC supply underwater; fear & greed index hits record low of 5 (“extreme fear”).

The world’s largest cryptocurrency did not ease into the dip. It fell hard and fast, as Bitcoin dropped to $60,000 at 7:20 p.m. ET on February 5, 2026, its lowest since September 2024, before clawing back to around $64,100. That not only erased most gains since Trump’s election night surge, it also triggered a violent leverage unwind.

Leverage surge as sentiment collapse  

Derivatives markets contributed to the rout. Over $817 million in long and short positions have been liquidated in the eight hours, pushing the 24-hour total to $2.67 billion, $2.31 billion from longs. 

JUST IN: BITCOIN FALLS TO $60,920 🤯 pic.twitter.com/01JZJKry98

— Bitcoin Magazine (@BitcoinMagazine) February 6, 2026

Bitcoin’s RSI hit oversold territory near 30, a level last seen at the 2022 bear bottom, when BTC fell another ~20% toward $60,000. A repeat move today would target similar depths.

Meanwhile, the CMC Crypto Fear & Greed Index has plunged to a reading of 5, landing in “extreme fear” territory, marking its lowest level since the index began tracking sentiment in June 2023.

NEW: Crypto fear & greed just hit its worst level since the index was created.. pic.twitter.com/egroNigDes

— Amonyx (@amonyx) February 6, 2026

Analysts are foreseeing a classic capitulation. “Bitcoin’s sharp drop looks like a perfect storm  forced liquidations from over-leveraged longs, ETF/institutional outflows, and a broader risk-off macro backdrop,” said Vincent Liu, CIO at Kronos Research. “This is a necessary flush of leverage that remained in altcoin markets prior to the sell-off.”

Rachael Lucas of BTC Markets added: “Sentiment is firmly risk-off as Bitcoin traders are no longer trying to catch falling knives, instead focusing on capital preservation. You can see that the way rallies are being sold into and the drop in volume when liquidation flows subside.” 

Repeated failures to hold key supports have flipped behavior from “buy the dip” to “wait for confirmation,” further emphasizing a downward momentum.

Macro and ETF context  

The plunge occurred amid macro uncertainty, including a looming U.S. government shutdown threat, while equities broadly sold off. Also, Institutional flows have turned negative. On February 3 and 4, 2026, spot bitcoin ETFs saw over $800 million in outflows. 

Bitfinex analysts also noted selective inflows from Altcoins such as Solana and XRP ETPs as a tactical rotation from large caps, but the major story remains one of leverage flush and risk aversion.

The crypto market is not waiting for a catalyst.
It is processing one.

As of February 4, 2026, U.S. spot Bitcoin ETFs have recorded approximately $1.61B in net monthly outflows, with a single-day peak redemption of $817M (Jan 29). This is not discretionary selling. It is the… pic.twitter.com/m8N1x5U67Q

— THEDEFIPLUG (@TheDeFiPlug) February 4, 2026

Bitcoin’s drop to $60,000 is a brutal flush, that has wiped out post-election euphoria and left 44% of supply underwater, testing conviction among late buyers and leveraged players. Users will take this as a reminder that BTC remains sentiment-driven and correlated to equities in risk-off moves, with no safe-haven status allowed. 

However, if $58–60K holds and macro stabilizes, a rebound is possible. If not, $60K will become the new ceiling until the ecosystem is able to rebuild conviction. The next few days of liquidation flows, ETF data, and macro headlines will decide whether this is the bottoming process or the start of something deeper.

Bitcoin traded at $65,194.00 on February 5, 2026, down by 8.6% over the last 24 hours.