Bitcoin plunged sharply Thursday, extending a bruising sell-off that has wiped out more than half of the cryptocurrency’s value since its October peak and renewed doubts about its role as a hedge against inflation or a safe-haven alternative to gold.
The world’s largest cryptocurrency briefly fell below $61,000 on February 5, sliding as much as 15% during the session to a low of $60,062 before recovering modestly to around $62,448 in late trading. The decline leaves Bitcoin down nearly 30% for the week and more than 50% from its high above $126,000 in early October, marking a dramatic reversal from the bullish expectations that dominated markets late last year, according to CNBC.
Analysts say the price action reflects a broad loss of confidence among traditional investors. Marion Laboure, an analyst at Deutsche Bank, wrote in a client note that “This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing.”
Bitcoin’s performance has lagged sharply behind gold, which has climbed substantially over the past year, while Bitcoin has fallen nearly 40% over the same period. Rather than decoupling from risk assets, the cryptocurrency has continued to trade in tandem with equities during bouts of market stress, undermining claims that it operates independently of traditional financial markets.
The sell-off has not been confined to Bitcoin. Ether has dropped roughly 33% this week, while Solana slid about 40%, touching lows near $88. James Butterfill, head of research at Coinshares, said $70,000 represents a critical inflection point for Bitcoin. He described it as a “key psychological level,” warning that “if we fail to hold it, a move toward” the $60,000 to $65,000 range “becomes quite likely.”
The sell off could be a disaster for Trump, and Democrats have already begun pouncing on the president.
Yikes pic.twitter.com/dfvbKMSRou
— Democrats (@TheDemocrats) February 5, 2026
Data from CryptoQuant suggest that institutional sentiment has turned decisively negative. The firm reported that “Institutional demand has reversed materially,” noting that U.S. spot Bitcoin exchange-traded funds—net buyers of roughly 46,000 Bitcoin around this time last year—have become net sellers in 2026. CryptoQuant also said Bitcoin has fallen below its 365-day moving average for the first time since March 2022, a technical break that previously preceded a 23% decline and was described by analysts as more severe than the early 2022 downturn. The firm pointed to potential further downside toward the $70,000–$60,000 range.
Broader market forces have added to the pressure. U.S. technology stocks continued to slide, with the State Street Technology Select Sector SPDR ETF down 1.8% on Thursday, extending a multi-day decline, while precious metals markets also experienced heightened volatility. Forced liquidations have amplified the move, with more than $2 billion in crypto positions wiped out this week, according to data from Coinglass.
Maja Vujinovic, chief executive of digital assets at FG Nexus, said the market is no longer driven by speculative enthusiasm. “
The straight line bull run that a lot of people expected hasn’t really materialized yet. Bitcoin isn’t trading on hype anymore, the story has lost a bit of that plot, it is trading on pure liquidity and capital flows,” she said in an interview on CNBC’s “Worldwide Exchange.”
The downturn, now extending more than three months, has left investors bracing for continued volatility as liquidations, weakening equity markets, and shifting institutional behavior weigh on the sector’s near-term outlook.
Pollster Scott Rasmussen of the Napolitan Institute told reporters on Wednesday that Americans’ optimism about their personal financial situation under President Donald Trump has begun to increase. Americans’ optimism for their personal financial situation increased from 24% to 32% since November, according to polling from Napolitan, according to The Daily Signal.
“Since the depths of despair in the midst of that government shutdown a couple of months ago, 4 out of 5 polls have shown some improvement,” Rasmussen said.
[Read More: Dem Goes On Unhinged Rant Over Bessent]
