Bitcoin Crashes 45 Percent From Record High as Global Sell-Off Deepens

Bitcoin plunged below $61,000 this week in its steepest single-day decline since the collapse of FTX in 2022. The world's largest cryptocurrency has now lost nearly half its value from the record high of $126,272 reached in October 2025, erasing more than two trillion dollars from the total crypto market capitalization.

A Week of Brutal Losses

The sell-off began on February 2 when Bitcoin fell below $80,000 for the first time since April 2025. Traders scrambled to exit leveraged positions as more than two billion dollars in long and short bets were liquidated across major exchanges within hours.

By February 3, the price had sunk to $72,884, its lowest mark since November 2024. But the worst was yet to come. On February 5, Bitcoin crashed 15 percent in a single session, briefly breaking below $61,000 before finding a fragile floor near that level.

The rout was not limited to crypto. Silver plunged 15 percent on the same day, gold slid more than two percent, and major U.S. equity indexes posted sharp losses. Analysts described the move as a broad liquidation event driven by a global flight from risk assets.

Relief Rally Offers Temporary Reprieve

Bitcoin staged a dramatic bounce on February 6, surging 11 percent to reclaim the $70,000 level and touching a session high of $71,458. The recovery came just 24 hours after the token nearly breached the psychologically critical $60,000 support line.

As of February 7, Bitcoin trades around $69,500 with elevated volume. Market participants remain cautious, noting that previous relief rallies during this correction have repeatedly failed to hold.

What Is Driving the Sell-Off

Several forces have converged to push Bitcoin lower. Exchange-traded funds that were aggressive buyers last year have turned net sellers in 2026. Institutional outflows from spot Bitcoin ETFs have accelerated since mid-January, removing a key source of demand that had supported prices throughout 2025.

Mounting concerns over quantum computing have added to the pressure. Some investors fear that advances in quantum technology could eventually compromise Bitcoin's cryptographic security model. MicroStrategy chairman Michael Saylor attempted to calm markets by pledging to lead a Bitcoin security initiative addressing the threat.

Federal Reserve uncertainty has also weighed on sentiment. The nomination of Kevin Warsh to succeed Jerome Powell as Fed chair has left traders guessing about the future direction of monetary policy, adding another layer of risk to an already fragile environment.

Key Levels to Watch

Analysts point to the 200-day moving average near $58,000 as the next major support level. That zone also coincides with Bitcoin's realized price, the average cost basis of all holders on the network, making it a critical line in the sand for bulls.

Some strategists warn that a break below $58,000 could open the door to a decline toward $40,000 to $50,000. Others note that the relative strength index is flashing deeply oversold conditions while trading volumes have surged to their highest in over two years, a technical setup that has historically preceded at least short-term recoveries.

For now, the market remains on edge. Whether this week's bounce marks the beginning of stabilization or merely a pause before further losses will depend on broader macro conditions and whether institutional buyers return to the market.