Bitcoin (BTC) began the first week of February trading near 16‑month lows as traders braced for further downside, with many forecasting a drop below $50,000 before a sustained bottom. BTC/USD slid to levels not seen since November 2024, extending losses after a grim weekend for risk assets.
Key takeaways
– BTC weakness continued into Monday, with price breaching April 2025 lows and traders highlighting heavy volume on recent drops as confirmation of bearish momentum.
– Weekly relative strength index (RSI) sits near oversold territory, a level last seen at 2022 bear market lows—some see this as a signal that a macro bottom is forming, while others caution the bottoming process often takes time.
– Macro shifts suggest broader liquidity concerns: gold and silver plunged sharply, U.S. dollar strength rebounded, and equities futures showed weakness.
– Coinbase Premium turned deeply negative, signaling a structural vacuum in U.S. spot demand for Bitcoin relative to Asian markets.
– Analysts noted open CME futures gaps near $84,000 and $95,000, arguing the recent downside may be a “fake out” that could later lead to gap fills if sentiment reverses.
Trader views and technical signals
Several traders warned that the market remained in a bear phase. Roman wrote that $76,000 is the last support before the $50,000 area and cited large volume on the drop as confirmation of bearish action, predicting $50,000 and possibly lower. CrypNuevo said a reversal may only begin after revisiting areas near the 2021 highs. Others pointed to CME gaps as potential magnet levels higher if sentiment shifts.
On technicals, weekly RSI is around 32.2—about two points above the conventional oversold threshold of 30—and some market participants noted that the weekly RSI is approaching levels seen at the end of the 2022 bear market. On shorter timeframes, 1‑day RSI readings at $76,000 showed pronounced oversold conditions. However, the monthly stochastic RSI remains a watchpoint: historically when the monthly stochastic RSI sinks below 20 it signals a prolonged bottoming process rather than an immediate reversal. Analysts caution that confirmation (stochastic RSI moving back above 20) historically precedes meaningful reversals.
Macro backdrop and liquidity warnings
Macro risk factors amplified the crypto rout. U.S. corporate earnings season featured heightened sensitivity after recent downside in large tech names, and several key macro releases were due during the week (ISM Manufacturing PMI, JOLTS, jobs data), alongside multiple Fed officials speaking. Mosaic Asset Company argued Bitcoin’s breakdown and a bearish head-and-shoulders pattern could be sending a warning about financial market liquidity later in the year, especially as fund manager sentiment approached bullish extremes.
Precious metals suffered dramatic volatility: gold fell from its recent highs, dipping to roughly $4,400 per ounce in Asia trading and erasing over 20% from its all-time peak in a matter of days, while silver plunged even more steeply. Mosaic tied the sharp commodity retracement to markets pricing in a potentially more hawkish Fed chair (the nomination of Kevin Warsh), which sparked a U.S. dollar rebound and put pressure on risk‑on assets including crypto.
Dollar strength and equities
The U.S. dollar index (DXY) had fallen earlier in the period but saw a rebound off multiyear lows, a move that typically weighs on crypto and precious metals. Analysts flagged that a renewed dollar rally and a more hawkish policy stance would support a risk‑off environment and could prolong downward pressure on Bitcoin.
Coinbase Premium and U.S. demand
Onchain analytics revealed a structural shift in spot demand. CryptoQuant highlighted that the Coinbase Premium—the price difference between Coinbase BTC/USD and Binance BTC/USDT—has been negative since mid‑December and recently hit its lowest levels in over a year. Where prior negative prints were brief and worked off (consistent with tactical selling), the current sustained negative premium suggests U.S. spot buyers have remained on the sidelines and Asian demand is outpacing U.S. demand. Persistent negative premium during price adjustments typically indicates buyers are not stepping in, adding to downward pressure during U.S. trading hours.
Outlook
Market participants remain divided. Some technical readings (weekly RSI near 2022 lows, short‑term RSI extremes) point toward conditions consistent with a potential macro bottom, yet indicators like the monthly stochastic RSI and structural demand metrics temper optimism and imply the bottoming process could take time. Macro risks—earnings sensitivity, possible Fed hawkishness, the dollar’s rebound, and a liquidity squeeze—could push Bitcoin toward the $50,000 area or lower before a sustained recovery.
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