Updated: February 5, 2026
Bitcoin entered a sharp capitulation phase in the first week of February 2026, dropping approximately 40% from its late-January local high near $126,000 to an intraday low of $71,800–$72,200 on February 4–5. The sell-off erased roughly $450–$500 billion in market capitalization and triggered one of the most violent deleveraging events of the cycle, with cumulative futures liquidations exceeding $16 billion across major exchanges in under 10 days (Coinglass data).
The crash was amplified by a confluence of macro, institutional and technical pressures: Treasury Secretary Scott Bessent’s explicit rejection of government bailout authority or strategic Bitcoin purchases during February 4 congressional testimony, accelerating spot ETF outflows, negative funding rates, and cascading long liquidations in over-leveraged positions. This article provides a comprehensive post-mortem of the February 2026 Bitcoin crash, including the primary catalysts, on-chain & derivatives signals, technical structure, sentiment extremes and realistic recovery scenarios.
Timeline of the February 2026 Bitcoin Crash
| Date | BTC Price Range | Key Catalyst / Event | 24h Change |
|---|---|---|---|
| Jan 28–31 | $118,000 → $108,000 | Fed “higher-for-longer” comments + tariff rhetoric | –8.5% |
| Feb 1–2 | $108,000 → $92,000 | ETF outflows accelerate, funding rates flip negative | –14.8% |
| Feb 3 | $92,000 → $78,000 | $2.2B+ liquidations in 24h, weekend thin liquidity | –15.2% |
| Feb 4 | $78,000 → $72,000 | Bessent testimony: “No bailout authority” | –7.7% |
| Feb 5 (intraday) | $71,800 low → $73,500 | Capitulation flush + partial dip-buying | +2.1% recovery |
Primary Catalysts Behind the Crash
- Treasury Secretary Bessent’s congressional testimony (Feb 4)
Explicit statement: “The Treasury Department does not have statutory authority to purchase cryptocurrencies with taxpayer funds” and “no power to direct banks to bail out crypto firms.” Removed any tail-risk bullish narrative about government reserve buying or implicit backstops → triggered tactical selling. - Massive futures liquidations cascade
Cumulative liquidations topped $16 billion in the 10-day window (Coinglass). Long-side dominance in the flush amplified downside momentum; funding rates turned deeply negative (longs paying shorts at –0.03% to –0.08%). - Spot BTC ETF outflows
Net redemptions exceeded $1.5–$2 billion in the first week of February, removing consistent spot bid support that had anchored price during prior corrections. - Macro & liquidity squeeze
Fed “higher-for-longer” messaging (no early cuts), renewed tariff threats (autos, semiconductors, copper), and geopolitical noise kept real yields elevated and risk appetite suppressed. - Technical breakdown confirmation
Loss of $84,000–$85,000 cluster (prior support) triggered algorithmic stop cascades and capitulation selling. ETH/BTC ratio made fresh cycle lows, underscoring altcoin weakness.
Technical Structure & Sentiment Extremes
Current Price (Feb 5 late session): ~$73,500
- Immediate Support: $72,000–$73,000 (intraday low zone)
- Critical Support: $68,000–$70,000 (200-week MA + psychological level)
- Next Major Support: $62,000–$65,000 (2025 consolidation zone)
- Immediate Resistance: $76,000–$78,000 (prior capitulation cluster)
- Medium-Term Resistance: $85,000–$88,000 (downtrend line from 2025 peak)
- RSI (daily): ~22–28 → extreme oversold, historically strong reversal zone
- Fear & Greed Index: 14–19 → capitulation-level reading
Trading Strategies on Tapbit – February 2026
- Sign Up on Tapbit (0% maker fees)
- Deposit USDT or JPY via bank transfer / P2P
- Capitulation accumulation: DCA BTC/USDT on pullbacks to $72k–$74k exhaustion zones
- Relief rally entry: Long BTC/USDT perpetuals on confirmed $76k–$78k reclaim (20–50x leverage, isolated margin)
- Risk-off hedge: Long XAU/USDT perpetuals if macro fears intensify
- Risk control: Max 1–2% account risk per trade; trailing stops below recent lows
FAQs – Bitcoin February 2026 Crash
What caused Bitcoin to crash in February 2026?
Treasury Secretary Bessent’s explicit rejection of bailout authority or government BTC purchases, $16B+ futures liquidations, accelerating ETF outflows, macro caution (Fed pause, tariffs), and technical breakdown below $84k–$85k support.
Is $72,000 the bottom for Bitcoin?
Possible local floor if support holds and ETF flows stabilize. Break below opens risk toward $68k–$70k (200-week MA). Sustained hold + volume confirmation would signal relief rally potential.
Should I buy Bitcoin after the crash?
$72k–$74k offers favorable risk/reward for staged DCA entries if conviction is high. Wait for $76k–$78k reclaim + higher volume before aggressive longs. Below $72k risks deeper test toward $62k–$65k.
Will the government ever buy Bitcoin?
Bessent confirmed no current authority exists. Any strategic reserve would require new legislation — unlikely in the near term given Treasury/Fed opposition.
Conclusion & Near-Term Outlook for Bitcoin
Bitcoin’s ~40% crash in early February 2026 — dropping below $72,000 — was triggered by a classic convergence of macro caution, leveraged flush ($16B+ liquidations), accelerating ETF outflows, and Treasury Secretary Bessent’s explicit rejection of government bailout authority or BTC purchases during February 4 congressional testimony. The move erased speculative froth and forced significant deleveraging, creating extreme oversold conditions (RSI ~22–28, Fear & Greed ~14–19).
Tapbit provides traders with optimal execution during fear-driven capitulation: 0% maker fees on BTC/USDT spot & perpetuals, deep liquidity, up to 125x leverage (use conservatively), staking/yield options, and instant fiat ramps. Key levels to monitor: $72k–$74k support hold, $76k–$78k resistance reclaim, ETF flow stabilization, February jobs report (Feb 7), CPI release (Feb 10–14), and Fed speaker commentary — capitulation extremes have historically preceded the strongest multi-month recoveries of every prior Bitcoin cycle.
Trade Bitcoin rebounds & volatility on Tapbit:
Disclaimer: Cryptocurrency trading involves significant risk of loss. Prices are highly volatile and can change rapidly. Government statements, ETF flows, funding rates and technical patterns do not guarantee future results. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research (DYOR) and never invest more than you can afford to lose completely.
