The recent drop in the price of Bitcoin is attributed to actions by major market participants, rather than panic among retail investors, according to technical analyst Peter Brandt.
Hey crypto followers $BTC
— Peter Brandt (@PeterLBrandt) February 5, 2026
The nature of the decline in Bitcoin (now 8 days of lower lows and highs) has all the fingerprints of campaign selling, not retail liquidation
Seen this before hundreds of times over the decades
Never know when of course this pattern ends
Note to trolls… pic.twitter.com/THGJpez35F
Brandt believes the price movement exhibits all the signs of a "planned sell-off." He noted that Bitcoin has been setting new local lows and highs for eight consecutive days, contrasting this with typical retail trader liquidations.
“I’ve seen this kind of thing hundreds of times over decades [in the markets],” the analyst emphasized.
Brandt added that it is impossible to predict exactly when this pattern will end. He also cautioned that the red lines on his chart are merely for discussion and do not guarantee a forecast.
Michael van de Poppe, founder of MN Trading, expressed a contrary view. He believes the markets are signaling a bottom rather than a peak.
The markets are flashing a bottom signal on #Bitcoin, not a peak signal
— Michaël van de Poppe (@CryptoMichNL) February 4, 2026
The business cycle is at its lowest point in 15 years.
The valuation of #Bitcoin vs. Gold is the lowest on the RSI it has ever been.
The valuation of #Ethereum vs. Silver is the lowest on the weekly and… pic.twitter.com/QQoJdScYS7
He provided several arguments:
- The business cycle is at its lowest point in 15 years;
- RSI for Bitcoin/Gold and Ethereum/Silver pairs has dropped to historical lows;
- Mass layoffs and the hype around AI indicate overheating in other sectors.
Van de Poppe described the current moment as ideal for accumulating positions. Among the growth factors, he highlighted the dovish stance of the Fed chair, QE, and the upcoming passage of the Clarity Act.
Analysts at Binance Research also noted the overheating of the U.S. stock market.
The S&P 500 rose to historic highs, alongside the ratio of U.S. stock market margin to M2 (now at 5.4% near the crisis levels of 2000 & 2008), indicating a leverage-driven blow-off may happen anytime. If the market begins to pull back, it will inevitably result in a broader asset decline… https://t.co/BvFfcDcCyI pic.twitter.com/vN5g71MQwB
— Binance Research (@BinanceResearch) February 5, 2026
The S&P 500 has reached a historic high amid high levels of margin debt. The ratio of borrowed funds to the money supply (M2) has approached the crisis levels seen in 2000 and 2008.
Additionally, the cryptocurrency market poses a risk: the aggregate leverage in Bitcoin has risen to 5.8%, significantly exceeding the five-year average of 4.88%.
BTC aggregated leverage ratio currently sits at 5.8%, above its 5-year average level of 4.88%, unlike the despair phase we had seen at the major cyclical bottom. https://t.co/BvFfcDcCyI pic.twitter.com/sfcfsLqjaM
— Binance Research (@BinanceResearch) February 5, 2026
According to analysts, the high level of leverage is atypical for the "despair" stage that the market usually experiences at cyclical lows.
Exchange experts warned that a correction in the stock market will inevitably impact digital assets.
Unfortunately, cryptos now sit at the end of the liquidity chain, often sold first during major selloffs to raise cash—yet their rebounds are overlooked. When precious metals crashed, cryptos fell too; but when metals recovered, cryptos kept dropping alongside software stocks… https://t.co/BvFfcDcCyI pic.twitter.com/nLQWBn2lHd
— Binance Research (@BinanceResearch) February 5, 2026
Cryptocurrencies are at the end of the liquidity chain: during major selloffs, investors often liquidate them first to move to cash.
Is Ethereum Overheated?
An analyst using the pseudonym CryptoOnchain has identified a troubling signal. On January 29, the smoothed transfer count (14SMA) on the Ethereum network reached 1.17 million. The expert believes this sharp increase could foreshadow a market crash.
Ethereum Transfer Count Surge: A Historical Warning Signal?
— CryptoQuant.com (@cryptoquant_com) February 5, 2026
“While high network activity often signifies adoption, a sudden 'parabolic' rise in transfer counts near price highs typically indicates an overheated network.” – By @CryptoOnchain pic.twitter.com/DqEPpv4Lmq
Historical analysis has revealed a pattern. Similar spikes in network activity occurred at two key turning points:
- January 18, 2018 — The surge in transactions marked the peak of the cycle and the beginning of a prolonged bear trend.
- May 19, 2021 — Anomalous activity coincided with a massive price crash.
Traditionally, an increase in on-chain metrics is considered a bullish factor. However, a parabolic rise near price peaks often signals overheating, typically occurring during moments of euphoria or capitulation.
The CryptoOnchain analyst linked the current anomaly to actions by whales and long-term holders who are transferring assets to exchanges to lock in profits.
This situation mirrors the scenarios of 2018 and 2021. Despite macroeconomic differences, the on-chain behavior of participants indicates high risks. The expert warned that traders should exercise caution and wait for confirming signals of a price drop in ETH.
As a reminder, on February 5, the price of the leading cryptocurrency dropped to $70,119 — its lowest since October 2024. Ethereum followed suit, falling to $2,079.