CryptoQuant expert Crazzyblockk has suggested that the market may have entered an "extremely bearish" phase, as indicated by the behavior of investors holding the leading cryptocurrency for 12 to 18 months.
Is Bitcoin Shifting Into an Extreme Bearish Market Regime?
— CryptoQuant.com (@cryptoquant_com) February 2, 2026
“Until Bitcoin reclaims this realized price level with renewed accumulation momentum, market structure continues to favor consolidation, fragile rebounds, and elevated downside risk.” – By Crazzyblockk pic.twitter.com/tBhtkzLkgT
Bitcoin is currently trading below the realized price for this group of investors, placing their positions in the unrealized loss zone. Historically, a price consolidation below this level has turned typical corrections into structural bearish trends.
The analyst noted a concerning accumulation trend. Despite an increase in balances over the past 30 days, the pace of purchases has significantly slowed, indicating a decline in market participants' confidence as they have stopped aggressively buying dips.
In the current environment, the realized price acts as a strong resistance level. When prices attempt to rise, investors tend to sell to break even, creating selling pressure.
Crazzyblockk believes that until the price stabilizes above the baseline value and accumulation resumes, Bitcoin will face consolidation, weak rebounds, and the risk of further declines.
Impact of the Fed
Bitcoin's price has dropped below the psychological level of $80,000. Analysts have linked this sharp decline to personnel changes at the Federal Reserve.
Experts at QCP Capital noted that the trigger was the confirmation of Kevin Warsh's nomination as the next Fed chair. Markets interpreted this as a signal for imminent tightening of monetary policy.
Consequences include:
- Massive liquidations. The decline triggered a wave of forced position closures due to deleveraging, with liquidated long positions exceeding $2.5 billion.
- Flight from risk. Investor sentiment has worsened amid a continued four-month outflow from ETFs. Traditional safe-haven assets like gold and silver have also retreated from their highs.
- Shift in expectations. The market is pricing in a higher likelihood of stimulus tapering under the new Fed chair.
Where's the Bottom?
QCP analysts consider the $74,500 level to be technically critical, as it aligns with the 2025 lows.
The options market remains cautious, with a bias towards puts, though there is no panic. A decrease in demand for hedging may indicate that investors are beginning to position themselves in anticipation of a local bottom.
Analysts outlined key scenarios:
- Bearish: A drop below $74,000 could lead to a retreat to the trading ranges of 2024.
- Bullish: A return above $80,000 would provide the market with some breathing room.
The $76,000 level serves as significant support, representing the average entry price for major institutional players.
At the time of writing, the leading cryptocurrency is trading at $77,534 (-1.8% over the past day).
15-minute BTC/USDT chart from Binance. Source: TradingView.Liquidity Shortage
CryptoQuant analyst Darkfost pointed out a fundamental issue—a structural liquidity shortage. He noted that after a surge in stablecoin market capitalization by $140 billion (since 2023), the trend reversed in December.
Stablecoin Flows Collapse
— CryptoQuant.com (@cryptoquant_com) February 2, 2026
“These dynamics highlight the particularly challenging environment in which Bitcoin is currently operating, weighed down by a persistent lack of liquidity that has now been impacting the market for several months.” – By @Darkfost_Coc pic.twitter.com/UNQAjN1s43
The flow dynamics to exchanges confirm the exit of investors:
- October: Net inflows of "stablecoins" exceeded $9.7 billion, pushing Bitcoin's price up;
- Since November: Inflows have turned into outflows, with over $4 billion being withdrawn from exchanges, of which $3.1 billion is from Binance.
Darkfost described this as the capitulation of late market participants. CryptoQuant analyst Arab Chain also warned of a critical moment.
Bitcoin on Binance: Elevated Volatility Signals a Critical Market Transition
— CryptoQuant.com (@cryptoquant_com) February 2, 2026
“Historically, a range z30 reading above +3 has often preceded strong price movements, either in the form of sharp upward breakouts or rapid downward moves.” – By @ArabxChain pic.twitter.com/BjGj90JrCC
He noted a spike in the volatility indicator (z30) on Binance above +3. Historically, such levels precede significant price movements—either sharp upward breakouts or crashes.
Amid the declining prices, Binance's SAFU fund purchased 1,315 BTC for $100.7 million.
Binance SAFU Fund just bought 1,315 $BTC ($100.7M). https://t.co/WwuOOWlMjj pic.twitter.com/jyGjUtY9bd
— Lookonchain (@lookonchain) February 2, 2026
As a reminder, in January, analysts predicted further declines for Bitcoin following the drop below $80,000.