The global cryptocurrency market is in the throes of a severe correction today, February 5, 2026, as Bitcoin (BTC) plummeted nearly 8% to test the critical $70,000 support level—its lowest price point since late 2024. The sudden downturn has wiped out over $775 million in leveraged positions across major exchanges, leaving bulls reeling from a brutal combination of Washington policy shocks and a broader Wall Street tech sell-off.
Bessent’s Congressional Bombshell: “No Bailout for Bitcoin”
The primary catalyst for today’s market rout was U.S. Treasury Secretary Scott Bessent’s blunt testimony before the House Financial Services Committee yesterday. In a heated exchange with lawmakers, Bessent explicitly ruled out any federal intervention to stabilize falling cryptocurrency prices, shattering the hopes of investors who had banked on the administration’s “Strategic Bitcoin Reserve” acting as a market backstop.
“I am Secretary of the Treasury. I do not have the authority to bail out Bitcoin, and the federal government has no intention of doing so,” Bessent stated firmly. He clarified that while the U.S. will continue to hold seized digital assets—now valued at over $15 billion—the 2025 executive order strictly limits the government to “budget-neutral” acquisitions. This means no taxpayer funds will be used to buy the dip, and no directives will be issued to private banks to increase their crypto exposure.
Market Reaction to Policy Clarity
The market’s reaction was immediate and unforgiving. The realization that the government would not step in to defend the price triggered a massive sell-off. Bitcoin, which had been hovering precariously above $75,000, smashed through support levels to touch an intraday low of $69,525 before staging a weak recovery to around $70,200.
Liquidations Hit $775 Million as Longs Capitulate
The speed of the drop caught leveraged traders off guard, triggering a cascade of forced liquidations. According to data from Coinglass, over $775 million in futures positions were wiped out in the last 24 hours, with long positions accounting for nearly 85% of the losses. This marks one of the largest single-day liquidation events of 2026.
Ethereum (ETH) has fared even worse than Bitcoin, plunging over 12% to trade near $2,100, a fresh nine-month low. The smart contract platform has been battered by a double whammy of regulatory uncertainty and waning institutional demand, with spot ETF outflows accelerating throughout the week.
Tech Sell-Off Contagion Spreads to Crypto
Compounding the crypto-specific headwinds is a broader “risk-off” sentiment sweeping through global financial markets. A deepening rout in the technology sector, driven by disappointing guidance from major semiconductor firms, has spilled over into digital assets. The Nasdaq Composite slid 1.8% yesterday, and Asian markets followed suit this morning, with heavyweights like Samsung and SK Hynix posting steep losses.
The correlation between Bitcoin and the Nasdaq has tightened significantly in Q1 2026, as institutional investors treat both asset classes as proxies for liquidity. As traders rush to cover losses in traditional tech stocks, they are liquidating their crypto holdings, creating a vicious cycle of selling pressure.
Technical Outlook: Is $60K Next?
Analysts are now warning that the worst may not be over. With the psychological support at $70,000 hanging by a thread, technical indicators are flashing “extreme fear.” If Bitcoin closes below this level on the daily chart, the next major support zone lies between $60,000 and $62,000.
“The $70k level is the last line of defense for the bulls,” noted a lead analyst at a major crypto hedge fund. “Bessent’s remarks have removed the perceived ‘Fed put’ for crypto. Without that safety net, the market has to find its true floor based on organic demand, which currently looks weak.”
For now, all eyes remain on the $70,000 mark. A bounce here could signal a short-term bottom, but with macroeconomic winds blowing cold and Washington standing firm on the sidelines, the path of least resistance appears to be down.
