The cryptocurrency market lacks growth catalysts, and selling pressure remains strong. Under these conditions, Bitcoin risks plummeting to between $56,000 and $58,000, according to Alex Thorn, head of research at Galaxy Digital.
— Alex Thorn (@intangiblecoins) February 2, 2026
From January 28 to 31, Bitcoin dropped by 15%, hitting a local low of $75,644. This sharp decline was triggered by the liquidation of long positions in the futures market, exceeding $2 billion—one of the largest events of its kind in history.
Prices fell below the average purchase price of Bitcoin ETFs in the U.S. ($84,000) and breached the cost basis of coins on the Strategy balance ($76,037).
January marked the fourth consecutive "red" month for the asset, a streak not seen since 2018.
Thorn noted a "gap" in coin distribution between $70,000 and $82,000, suggesting a high likelihood that the price will test the lower boundary of this range.
If the decline continues, the next key support levels will be:
- $58,000 — 200-week moving average (MA);
- $56,000 — realized price of Bitcoin (the average price of the last movement of all coins in the network).
“Historically, these levels have marked the bottom of market cycles and served as excellent entry points for long-term investors,” the researcher noted.
At the time of writing, 46% of Bitcoin holders were at a loss. Thorn emphasized that the current drop from the all-time high stands at 38%. Except for 2017, a 40% decline has typically extended to 50% or more within three months.
Additional pressure comes from outflows from ETFs, which have lost $2.8 billion over the past two weeks.
The analyst also pointed to the failure of the narrative that Bitcoin serves as a hedge against fiat currency devaluation. Amid geopolitical instability and debt issues, investors have preferred traditional metals—gold and silver—over digital gold.
The only positive signal, according to the expert, is the slowing profit-taking by long-term holders. However, there are currently no signs of significant accumulation by whales.
Declining Demand for Bitcoin
Analyst Darkfost noted that demand in the spot market is drying up. On Binance, trading volume for the leading cryptocurrency has fallen from $200 billion in October to $104 billion.
🗞️ Spot demand is drying up: Bitcoin enters its 5th month of correction
— Darkfost (@Darkfost_Coc) February 2, 2026
We are now entering the 5th consecutive month of correction for Bitcoin.
This correction has been largely driven by the October 10th event, which led to a massive destruction of liquidity, particularly in… pic.twitter.com/rX2keResNG
Metrics have returned to early 2024 lows.
Pressure is also coming from outflows of stablecoins from exchanges, with their market capitalization decreasing by about $10 billion.
Justin d’Anetan, head of research at Arctic Digital, linked the current issues to macroeconomic factors. Uncertainty surrounding the Fed's policy and the potential appointment of Kevin Warsh threatens to strengthen the dollar, negatively impacting risk assets.
Nonetheless, d’Anetan described the market decline as "bitter but necessary medicine." The correction will help eliminate excess leverage and cool speculation.
Alphractal founder Joao Wedson believes Bitcoin has not yet hit bottom. He argues that a reversal will occur when short-term holders realize losses below the realized price of long-term investors. This has not happened yet.
The Bitcoin price bottom only happens when…
— Joao Wedson (@joao_wedson) February 2, 2026
✅ Short-Term Holders are in loss (this has already happened)
⏳ Long-Term Holders start carrying losses (this has not happened yet — this is when the real bottom forms))
Additionally:
🔴 The bear market only ends when the STH… pic.twitter.com/xbuKAgem1O
Wedson warned that a drop below the support level of $74,000 could push Bitcoin into bear market territory.
At the time of writing, the first cryptocurrency is trading at $78,696 (+2.5% over the past day).
In February, Bernstein analysts forecasted a minimum of $60,000 for Bitcoin.