Bitcoin Plunge to $64,910 Sparks 'Hidden Hand' Theories Amid Extreme Fear

VADODARA, February 6, 2026 — Bitcoin's sharp decline to $64,910, marking an 8.67% drop, has ignited intense speculation among traders that macroeconomic factors alone cannot explain the sell-off. According to a CoinDesk report cited by Coinness, market participants are increasingly pointing to a potential 'hidden hand' orchestrating the plunge, with theories ranging from sovereign nation dumps to forced options liquidations. This latest crypto news event unfolds as the Crypto Fear & Greed Index plunges to an 'Extreme Fear' score of 9/100, signaling deep market distress.

Investigation: Deconstructing the 'Hidden Hand' Theories

Market structure suggests the recent price action deviates from typical macro-driven deleveraging. The primary theories, as reported by CoinDesk, propose specific, high-impact catalysts. First, a massive sell-off by an 'invisible hand' potentially involving a nation-state like Saudi Arabia, the UAE, Russia, or China dumping over $10 billion in BTC. Alternatively, an exchange facing bankruptcy may have triggered forced liquidations. Second, the failure of a yen carry trade by Asia-based traders could have cascaded, where a large non-crypto firm engaged in leveraged market making on Binance faced unwinding pressure. Third, forced liquidation of BlackRock's iShares Bitcoin Trust (IBIT) options is suspected, given IBIT recorded its highest-ever trading volume at $10.7 billion and options premium of $900 million. This pattern resembles large-scale options position unwinding rather than organic selling. Fourth, Hong Kong hedge funds that borrowed yen for high-leverage bets on IBIT options may have dumped BTC holdings after rising funding costs and losses in silver trading.

Market Context & Historical Precedent

Historically, Bitcoin sell-offs attributed to macro factors like Fed rate hikes or inflation data show gradual, volume-profile-aligned declines. In contrast, this event's velocity and concentrated theories suggest a liquidity grab from a single large entity. Underlying this trend is a critical divergence: on-chain data from Glassnode indicates exchange outflows, yet price action shows aggressive selling pressure—a contradiction that fuels the 'hidden hand' narrative. This mirrors the 2021 China mining ban sell-off, where a specific catalyst caused a sharp, non-macro drop. , the current extreme fear sentiment echoes the March 2020 crash, where panic selling led to a V-shaped recovery once hidden liquidity was absorbed.

Related Developments: This plunge occurs amid broader market stress, as seen in Bitcoin breaking below $61,000 support and entities like TrendResearch depositing 20,000 ETH to avoid liquidation.

Technical Architecture & Price Action

Technical analysis reveals a critical Fair Value Gap (FVG) between $67,000 and $69,000 that must be filled for bullish structure recovery. The current price of $64,910 sits below the 50-day moving average, with RSI dipping into oversold territory at 28. Market structure suggests key support at the $63,000 level, aligning with the 0.618 Fibonacci retracement from the recent all-time high. A break below this invalidates the bullish order block established in late January. Conversely, resistance forms at $68,500, a previous volume node. The rapid decline indicates stop-loss hunting and liquidation cascades, typical of forced selling events rather than organic macro repricing.

By The Numbers

Why It Matters

This event matters because it challenges the foundational narrative that Bitcoin's price is primarily driven by macroeconomic liquidity cycles. If a 'hidden hand'—such as a nation-state or failing institution—can precipitate an 8.67% drop, it exposes latent systemic risks not captured in traditional models. Institutional investors, who rely on macro correlations for portfolio allocation, must now account for opaque, large-scale actors. , the forced liquidation theories around IBIT options highlight the growing complexity and leverage in crypto derivatives, which can amplify sell-offs. Retail market structure is also impacted, as stop-losses are triggered en masse, creating liquidity vacuums that exacerbate volatility.

Expert Commentary

"The velocity and narrative divergence here are telling. Macro factors like Fed policy operate on a slower, more transparent timeline. This sell-off's signature suggests a concentrated liquidity event—possibly a sovereign wealth fund rebalancing or a leveraged entity unwinding. The critical level to watch is the $63,000 support; a break there confirms structural damage beyond typical fear-driven selling." — CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Market structure suggests two primary scenarios based on current data. First, a bullish recovery if the $63,000 support holds and the FVG up to $69,000 is filled, driven by bargain-hunting and short covering. Second, a bearish continuation if support fails, potentially targeting the $60,000 psychological level, as forced selling cascades. The 12-month institutional outlook hinges on identifying the 'hidden hand.' If it's a one-off event, Bitcoin may resume its macro-driven trend. If it reveals ongoing opaque selling pressure, volatility could persist, affecting long-term adoption narratives.

• Bullish Invalidation Level: $68,500. A break above this resistance, confirmed with high volume, would negate the bearish structure and suggest the sell-off was absorbed, potentially leading to a retest of higher highs.
• Bearish Invalidation Level: $63,000. A sustained break below this support, especially on closing basis, invalidates the current bullish framework and opens the path for further declines toward $60,000.