Bitcoin experienced a dramatic sell-off recently, with ETF outflows and macroeconomic concerns driving a sharp price correction. Here’s a detailed breakdown of what happened, key support levels, and recovery outlook.
Thursday saw a dramatic fall in the price of bitcoin, which temporarily fell below $60,000—its lowest level since September 2024—before rising to almost $70,000 the next day. In October 2025, it reached its most recent peak of $123,000.
Bitcoin Sell-Off Overview
As large liquidations and ongoing ETF outflows increase selling pressure, Bitcoin has seen its steepest decline since late 2024, and it is currently down over half from its peak in October 2025. Extreme fear readings and high volatility indicate continued deleveraging, while the market’s defensive tone has been reinforced by the repeated inability to sustain recoveries above the $70,000–$72,000 range, according to Avinash Shekhar, co-founder and CEO of Pi42.
The decline to $60,000 was a 17 percent intraday swing, indicating increased market volatility for cryptocurrencies. The Crypto Fear & Greed Index fell to 5 or Extreme Fear, its lowest rating since mid-2023, as the general sentiment shifted risk-off, according to Riya Sehgal, Research Analyst, Delta Exchange.
Technical Triggers Behind the Sell-Off
Bitcoin’s decline below important technical levels set off the sell-off, according to Vikram Subburaj, CEO of Giottus.com. According to Glassnode statistics, it has dropped below the True Market Mean, which measures the average price of actively traded currencies and, once breached, usually becomes resistance. More recent purchasers are currently losing money, which raises the possibility of forced selling during steep drops.
Flows of Institutions
“Institutional flows have provided little consolation,” he continued. US spot Bitcoin ETFs had significant net outflows earlier in the week, with withdrawals totaling almost $545 million on February 4 alone. The January jobs report and CPI data are among the several postponed US data announcements that markets are anticipating next week.
Strong inflation or labor data might further depress prospects of rate cuts by the Fed. The combination will not be favorable for cryptocurrencies if Treasury yields continue to rise and the currency stays strong. Due to ongoing inflation pressures, traders are still hesitant to price in Fed funds futures too soon, even though they still indicate rate decreases later in 2026.
📉 Massive Bitcoin ETF Outflows
- Date: February 4, 2026
- Net Outflow: $545 million
- Effect: Increased selling pressure on Bitcoin
- Investor Impact: Recent buyers at loss, potential forced selling
- Market Sentiment: Shifted to Extreme Fear
Key Support & Resistance Levels
The closest significant support band, according to analysts, is between $60,000 and $63,000. Earlier, there was a brief buying interest in the $68,000–$70,000 range. On the upside, the $73,000–75,000 area that was formerly support has now become immediate resistance. Stabilizing the tape would need a persistent move back above that zone. “If we do not maintain above $60,000, we may see more declines toward realized-price levels that are closer to the mid-$50,000s,” he warned.
With limited purchasing demand, tighter liquidity, and macro uncertainty pushing prices, the general mood is solidly risk-off. Crypto markets will probably continue to be under pressure until ETF flows stabilize and US data make the Fed’s policy outlook more clear.
⚡ Bitcoin Market Outlook
- Support Band: $58,000–$62,000
- Resistance: $71,000–$72,000
- Consolidation Potential: Reduce volatility & restore confidence
- Recovery Path: Stabilization may lead to gradual rebound
Frequently Asked Questions
1. What caused Bitcoin to plummet below $60,000?
Significant ETF withdrawals, the breach of important technical support levels, and general macroeconomic concerns were the main causes of Bitcoin’s collapse. Forced selling increased with the instability since recent purchases were losing money.
2. How did institutional flows function?
There were notable net withdrawals from US Spot Bitcoin ETFs, including one of $545 million on February 4. This increased selling pressure and decreased institutional backing.
3. What role does the $60,000–$63,000 support band play?
It is believed that this range is the closest significant support. While a breach could result in larger losses towards the mid-$50,000s, holding above it could stabilize the market.
4. What effects do macroeconomic variables have on Bitcoin?
Future US statistics, including CPI and employment reports, may have an impact on Fed rate projections. Strong data might push down cryptocurrency prices, delay rate cuts, and strengthen the dollar.
5. How likely is it that Bitcoin will recover?
Bitcoin encounters opposition between $71,000 and $72,000. Above $58,000–$60,000, consolidation may reduce volatility, boost confidence, and set the stage for a slow recovery.
Conclusion
After a significant correction that saw it drop by almost 50% from its peak in October 2025, Bitcoin has entered a period of volatility. Technical resistance levels, macroeconomic uncertainty, and significant ETF outflows are preventing sentiment risk from rising.
A sustained move over $71,000 may signal the beginning of fresh rising momentum, although stabilization above the $58,000–$60,000 support range is essential for recovery. Investors and traders should exercise caution and seek guidance from US economic statistics and institutional flows.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are subject to high risk.
