The cryptocurrency market has just experienced one of its most dramatic events of 2026. February 1st, now dubbed « Black Sunday, » witnessed Bitcoin plummet below $80,000, triggering a record cascade of liquidations that shook the entire crypto ecosystem to its core.
Massive Capitulation: Black Sunday by the Numbers
Within 24 hours, Bitcoin breached several critical thresholds to reach a local bottom at $75,731 before stabilizing around $78,493, representing a 6.68% daily decline. This precipitous drop triggered one of the largest liquidation waves ever recorded in the crypto market.
The carnage statistics:
- Total liquidation volume: $2.2 to $2.58 billion
- Bitcoin liquidations: $679 to $780 million
- Ethereum liquidations: $961 million to $1.1 billion
- Number of liquidated traders: Over 430,000
- Current price: $78,493
This massive purge reflects excessive over-positioning by traders on perpetual futures contracts, with over two-thirds of liquidations involving long positions. The market was clearly too optimistic before the breach of the $85,000 pivot.
Multi-Timeframe Technical Analysis: Where is Support?
15-Minute View: Intraday Panic
The 15-minute chart reveals a parabolic acceleration of the decline starting Saturday afternoon. The initial breach of the $82,000 level catalyzed a series of downward gaps and record volume candles. The RSI plunged below the 20 mark, signaling extreme oversold conditions that temporarily halted the decline near $76,000.
However, the subsequent bounce lacked conviction, with price remaining trapped below short-period exponential moving averages. The structure remains that of a « bearish relay » as long as Bitcoin fails to reclaim the $79,500 level as local support.
4-Hour View: The Critical Pivot Lost
The 4-hour timeframe offers the most relevant perspective for fund managers. Bitcoin officially shifted into bearish regime on this horizon following the loss of pivot support at $85,150. This level, which had served as solid foundation twice in January, has now transformed into formidable resistance.
The « Sell Power » indicator displays an overwhelming value of 89, confirming the dominance of selling pressure. Price currently sits well below the Ichimoku cloud and major moving averages (EMA20 at $80,055 and EMA50 at $82,227), which now act as barriers to any recovery attempt.
Daily View: The Great Correction
The daily chart illustrates the impressive magnitude of the correction from the all-time high of $126,110. Bitcoin has retraced approximately 30%, an amplitude that historically corresponds to major corrections within post-halving bull cycles.
The current $75,000-$78,000 zone coincides with April 2025 lows, making it a crucial historical defense line for bulls. Fibonacci retracement application reveals major inflection points:
- 0.236 level at $99,250: Bull Market recovery threshold
- 0.382 level at $82,000: Technical and psychological resistance
- 0.50 level at $74,500: Ultimate floor to maintain bullish structure
Order Book Analysis: The Liquidity Battle
The liquidity heatmap reveals an extremely segmented battlefield between $75,000 and $90,000. The massive concentration of buy liquidity (bids) between $82,000 and $86,000 was completely swept away during the weekend, indicating that forced sell orders from liquidations overwhelmed passive buyers’ absorption capacity.
Currently, a new « wall » of buy orders is beginning to form between $74,000 and $77,000, suggesting large investors are seeking to establish a floor in this zone. Above current price, the order book is obstructed by increasing density of sell liquidity (asks) centered on $89,000-$91,000.
The market appears « boxed » in a combat zone between $75,000 and $88,000, where volatility will reign until persistent institutional accumulation reappears.
Macroeconomic Context: Catalysts of the Collapse
Kevin Warsh Nomination: Fed Regime Change
Kevin Warsh’s nomination to succeed Jerome Powell as Federal Reserve Chairman has injected a massive dose of uncertainty into risk assets. Warsh is perceived by the financial community as a « hawk » who could advocate for drastic Fed balance sheet reduction and a less accommodative approach toward market liquidity.
Bitcoin, which has historically thrived in abundant liquidity environments, is bearing the full brunt of this tightening perspective. This nomination triggered capital rotation from cryptocurrencies toward traditional precious metals, with gold reaching highs above $5,000 per ounce during the same period.
U.S. Government Shutdown
The partial shutdown of the U.S. federal government, which began at midnight on January 31, 2026, has aggravated the situation. Although the Senate adopted provisional funding, the House of Representatives couldn’t vote before the weekend, leaving markets in administrative limbo.
For Bitcoin traders, this shutdown means potential delays in inflation and employment data publication, creating informational « blind spots » conducive to risk aversion. During uncertain periods, liquidity tends to withdraw from markets over weekends, exacerbating sharp movements during forced sales.
MicroStrategy and the MSCI Decision
MicroStrategy’s (MSTR) fate has also weighed on market sentiment. After months of anxiety, index provider MSCI decided not to exclude « Digital Asset Treasury Companies » (DATCOs) from its global indices for the February 2026 review. However, this decision comes with restrictions: MSCI won’t increase these companies’ weighting despite their new share issuances.
This weakens Michael Saylor’s « flywheel, » which relies on the ability to raise funds to purchase more Bitcoin. MicroStrategy’s premium compression relative to its net asset value (NAV), recently fallen below 1.0x, indicates the market is beginning to revalue the company.
On-Chain Data: What Does the Blockchain Reveal?
On-chain data provides valuable radiography of investor psychology. Currently, the Bitcoin network shows signs of transitioning from a « Belief » phase to an « Anxiety » phase.
Key metrics:
- NUPL (Unrealized Profit/Loss): « Anxiety » zone – Growing doubt, risk of late capitulation
- MVRV Ratio: Near 1.0 – Current price aligned with on-chain average cost
- STH Realized Price: $98,300 – Recent buyers are massively underwater
- Active Supply (<3 months): +37% – High distribution velocity
- Puell Multiple: 0.9 – Miner margins under pressure, not distressed
The increase in active supply within the short-term holder cohort indicates that investors who entered during the push toward $120,000 are selling their positions. The fact that current price sits well below short-term holders’ average cost basis ($98,300) creates a massive psychological resistance wall.
Conversely, long-term holders are realizing much more modest profits (approximately 12,800 BTC per week versus over 100,000 at the peak), suggesting « Smart Money » has already completed most of its distribution and now awaits more attractive levels to re-accumulate.
Bitcoin ETFs: From Euphoria to Disenchantment
Spot Bitcoin ETFs, which were the primary driver of 2025’s rally, are experiencing a reflux phase. After attracting over $21.4 billion throughout 2025, flows dried up at year-end to transform into alarming net outflows.
During the three days preceding February 1st, Bitcoin ETFs recorded approximately $985 million in net outflows. This movement is led by institutional funds reducing positions as they no longer consider Bitcoin an effective hedge against budgetary uncertainty.
Nevertheless, the anticipated entry of giants like Morgan Stanley with new ETF products could offer a second wind at medium term, provided price stabilizes above major technical supports.
Scenarios for February 2026
Bitcoin’s immediate future will depend on buyers’ ability to defend the $74,000-$76,000 zone. Three possible trajectories emerge:
1. Lateral Consolidation (Probability: 50%)
Bitcoin remains trapped in a wide range between $75,000 and $88,000. The market digests Black Sunday’s massive liquidations and awaits clearer signals from the Fed and House of Representatives regarding the budget. Sentiment remains marked by fear, preventing any impulsive rally, but long-term buyers discretely accumulate each dip below $78,000.
2. Prolonged Capitulation (Probability: 30%)
If $74,000 support breaks under massive new ETF outflows or geopolitical escalation, Bitcoin could test the final capitulation zone between $68,000 and $72,000. Such a decline would likely force MicroStrategy to reassess its position and could trigger retail panic selling, marking the true bottom of the correction cycle.
3. Technical Rebound (Probability: 20%)
A rapid bounce toward $90,000 could only occur if the shutdown is immediately resolved through bipartisan vote and ETF flows aggressively turn positive. However, given identified resistance density and momentum indicators (daily RSI still below 30), this scenario appears least likely in the short term.
Key Technical Levels to Monitor
| Level | Price | Function |
|---|---|---|
| Major Resistance | $99,000-$102,000 | Bull Market recovery threshold |
| Intermediate Resistance | $91,000-$94,700 | January distribution zone |
| Short-term Pivot | $85,150 | Former support / Polarity test |
| Immediate Support | $75,700-$78,500 | February 1st low / Active liquidity |
| Major Support | $74,000-$74,500 | April 2025 low / Fib 0.50 support |
| Psychological Support | $69,000-$72,000 | Potential final capitulation zone |
Conclusions and Outlook
Black Sunday of February 1, 2026 marks a potential turning point for the cryptocurrency market. The end of the easy liquidity era under Jerome Powell and Kevin Warsh’s advent impose a reassessment of risk premium accorded to digital assets.
Key takeaways:
- The $85,150 pivot is now the demarcation line between a market in healthy correction and a market in structural distress
- The liquidity zone between $74,000 and $77,000 constitutes a major technical floor whose preservation is essential
- Long-term holder profit realization exhaustion suggests we’re potentially approaching a cyclical bottom in terms of distribution
- The disconnect with gold indicates Bitcoin hasn’t yet acquired universal « safe haven » status, remaining closely tied to liquidity cycles
The market enters a period where rigorous entry level selection and strict leverage management will be determinant. Black Sunday reminded us that in the world of digital assets, liquidity is a fleeting ally that, when it withdraws, leaves only the unforgiving reality of order books.
⚠️ Disclaimer: This article is published for educational and informational purposes only. It does not constitute investment, financial, or purchasing advice under any circumstances. Cryptocurrency markets are extremely volatile and carry significant risks of capital loss. Any investment decision must be made after consultation with a professional financial advisor and based on your personal situation. The author and Cryptoinfo.ch disclaim all liability for financial losses that may result from using the information contained in this article.
