Breaking: Bitcoin Amid Earthquake's Claws - Sharp Decline and Possible Recovery

The cryptocurrency market is now experiencing a sharp turning point after days of intense turmoil. What happened on Saturday, January 31, 2026, was a severe shock that hit investors’ wallets, but the current situation tells a different story than what was expected at that time.

Sharp Decline - Bitcoin Falls Beyond Expectations

During that intense downtrend, Bitcoin lost more than 6% of its value within a few hours, reaching levels close to $81,000. The decline was not limited to the main asset but extended to the entire market — Ethereum and Solana experienced similar sharp declines. The blow was distributed across the sector, reflecting the level of panic that seeped into traders’ circles.

Now, after several days, Bitcoin is trading at $70,720, with a daily increase of 1.82%. This shift indicates the beginning of stability after the chaos that the markets experienced.

Market Indicators and Fear - Investor Panic Reaches Its Peak

The Fear and Greed Index on that ominous day recorded a record low of just 16 points — the lowest since the beginning of the year. This number reflected a state of collective panic, indicating that traders were in a very critical psychological state.

Today, sentiment has shifted to a more balanced state, with a clear but moderate tilt toward pessimism: 50% of the market still maintains a negative outlook. This means confidence has not fully returned to previous levels, but blind panic has begun to subside.

Causes of the Collapse - Federal Reserve and Monetary Policy

What caused this sudden crash? The answer lies more in Washington than in the crypto markets themselves.

Federal Reserve Decision: The Fed announced holding interest rates steady at current levels and issued hawkish hints about fighting inflation. This decision was a painful slap to venture capital markets, including cryptocurrencies.

Expectations about the New Leadership: There was increasing speculation about appointing Kevin Worch as the Federal Reserve Chair, a figure known for her inclination to tighten monetary liquidity. This expectation shook investor confidence in high-risk assets.

Mass Liquidation of Positions: On the technical side, there was a violent liquidation of large buy positions, especially as options contracts expired at sensitive price levels, leading to successive sales.

From Collapse to Stability - The Current Situation

Today, February 9, 2026, the market stands at a completely different turning point. Bitcoin is holding near $70,720 with a slight increase. This means the market has not slipped into a second abyss as feared but has begun to seek a new and stable bottom.

The current situation suggests three possibilities: either maintaining the current stability and holding above $70,000, or a new attempt to rise toward higher levels, or testing additional support levels around $69,000. In any case, the intense panic that the market experienced is beginning to fade, replaced by cautious prudence and awaiting the next steps from monetary policymakers.