Bitcoin drops sharply: What happened in the market and what are the reasons

In early February 2026, Bitcoin experienced its most significant decline in the past year and a half. As the leading asset in the cryptocurrency space, its price retreated to levels seen in November 2024. This correction was accompanied by increased volatility, mounting selling pressure, and a general deterioration of market sentiment across the crypto industry. This trend was not coincidental but resulted from the combined effects of macroeconomic conditions, technical signals, and behavioral factors.

The decline began at the end of January, when Bitcoin failed to hold a key resistance level. After breaking below the $78,000 to $80,000 range, selling pressure intensified further, and the market quickly entered an accelerated downtrend. Over several consecutive trading days, BTC repeatedly hit local lows, at one point falling below $70,000, marking its lowest level in over a year.

Bitcoin’s downturn occurred amid a broad sell-off of risk assets. Investors not only reduced their crypto holdings but also decreased their positions in other high-risk assets to cope with worsening global market conditions. Market sentiment shifted toward “risk aversion,” leading to diminished demand for digital assets and increased selling pressure. The entire crypto market moved in tandem: besides Bitcoin, Ethereum and other major altcoins also declined simultaneously, highlighting the systemic nature of this correction.

Reduced institutional demand was one of the core drivers of this decline. In early 2026, analysts observed outflows from Bitcoin-related investment products, including exchange-traded funds (ETFs). Large investors, after years of strong growth, began trimming their holdings, significantly weakening long-term price support. Against this backdrop, the market’s resilience to sharp volatility and panic selling was noticeably diminished.

Changes in the derivatives market also intensified downward pressure. After key technical levels were breached, long positions on futures platforms faced large-scale forced liquidations. These passive liquidations further amplified the decline, accelerating the price drop. Such chain reactions are especially common during periods of high volatility, as many trading strategies rely on leverage.

From a technical perspective, the market had already shown signs of fatigue before the sharp decline. Bitcoin’s price broke below critical moving averages, and rebound attempts were accompanied by declining trading volumes. These signals indicated weakening market momentum and a transition into a correction phase. Coupled with active selling, this ultimately led to a sustained bearish trend, which was concentrated in early February.

During this sell-off, the $70,000 level became a critical psychological and technical support zone, gradually forming since late 2024. As prices approached this level, the downward speed temporarily slowed, and trading activity increased. However, overall sentiment remained cautious, with many investors choosing to wait for clearer signs of stabilization.

Bitcoin’s correction had a significant impact on the entire crypto market. The total market capitalization of digital assets declined, and speculative activity temporarily cooled. Analysts note that the current situation bears similarities to previous cyclical downturns, as the market undergoes a process of capital reallocation and risk reassessment.

For investors, the February 2026 Bitcoin decline serves as a reminder of how heavily the crypto market depends on external factors and sentiment shifts. This correction shows that even after prolonged rallies, markets remain vulnerable to demand weakening and rising uncertainty. At the same time, such phases are often viewed by some participants as part of the long-term market cycle rather than isolated events.

In summary, the sharp decline of Bitcoin in early 2026 was the result of multiple factors: worsening macroeconomic conditions, declining institutional participation, technical trend reversals, and large-scale forced liquidations in the derivatives market. These events highlight the high correlation between the cryptocurrency market, the global financial system, and its own trading structures. Each key volatility can trigger a chain reaction across the entire market.