Bitcoin Price Action: BTC Falls Below $72,000 Amid Extreme Market Fear

VADODARA, February 4, 2026 — According to CoinNess market monitoring, Bitcoin (BTC) has broken below the $72,000 psychological threshold, trading at $71,920.9 on the Binance USDT market. This Bitcoin price action occurs as the Crypto Fear & Greed Index plunges to 14/100, indicating extreme market fear. Market structure suggests a potential liquidity grab targeting retail stop-loss orders clustered around key support zones.

Investigation: The Technical Breakdown of Bitcoin's Decline

CoinNess data confirms BTC's descent below $72,000 on February 4, 2026. The asset currently trades at $71,902, reflecting a 24-hour decline of -5.02%. This move invalidates a previous order block that had provided support since late January. On-chain forensic data from Glassnode indicates increased exchange inflows, suggesting selling pressure from short-term holders. Consequently, the market faces a critical test of institutional accumulation zones.

Market Context & Historical Precedent

Historically, Bitcoin corrections of 5-10% during bull markets often precede renewed upward momentum. In contrast, the current extreme fear reading mirrors sentiment during the March 2020 liquidity crisis. Underlying this trend, the Federal Reserve's monetary policy stance, as detailed on FederalReserve.gov, continues to influence macro liquidity flows into risk assets. This event breaks from the 2021 cycle where similar fear levels led to prolonged consolidation.

Related Developments:

• Earlier Bitcoin price action saw BTC test $73,000 support
• 250 million USDC minted amid extreme market fear raises liquidity questions
• Tiger Research argues current downturn differs from true crypto winter

Technical Architecture & Price Action

Market structure reveals a clear bearish order block between $72,500 and $73,200. The Relative Strength Index (RSI) on daily charts sits at 42, indicating neutral momentum with bearish bias. A critical Fibonacci retracement level at $70,500 (0.618 of the recent rally) now serves as major support. , the 50-day moving average at $74,000 acts as dynamic resistance. Volume profile analysis shows low liquidity below $71,000, increasing volatility risk.

By The Numbers

Why It Matters

This price action tests institutional conviction. Large UTXO holders (entities holding >1,000 BTC) have not significantly increased selling, per Glassnode data. However, retail sentiment deterioration could amplify downside if $70,500 fails. The extreme fear reading often precedes contrarian rallies, as seen in Q4 2022. Market analysts note that sustained breaks below psychological levels like $72,000 trigger algorithmic selling across derivatives platforms.

Expert Commentary

CoinMarketBuzz Intelligence Desk analysis indicates this move targets weak-handed liquidity. The Fair Value Gap (FVG) created above $73,000 remains unfilled, suggesting potential for a swift reversal if institutional bids materialize at lower supports. Historical cycles show that extreme fear readings coupled with technical oversold conditions frequently mark local bottoms.

Market Outlook & Price Scenarios

Two data-backed scenarios emerge from current market structure.

• Bullish Invalidation Level: $74,500. A daily close above this resistance would invalidate the bearish structure and target the previous all-time high zone near $78,000.
• Bearish Invalidation Level: $70,500. A sustained break below this Fibonacci support confirms deeper correction toward $68,000, the next major liquidity pool.

The 12-month institutional outlook remains cautiously optimistic. Adoption of Bitcoin ETFs continues to provide structural demand, but macro headwinds from traditional finance may pressure prices in the short term. Over a 5-year horizon, network fundamentals like hash rate and active addresses support long-term appreciation.