Why Is Crypto Down Today? – February 5, 2026: The Market’s Reality Check

Crypto markets tumble—again. The digital gold rush hits another speed bump as February 5, 2026, delivers a sobering reminder that what goes up must, occasionally, come down.

The Liquidity Squeeze

Major exchanges report thinning order books. Institutional players pull back, leaving retail traders holding the bag. It’s the classic Wall Street playbook—just with more blockchain jargon and less regulation.

Regulatory Headwinds Bite

Global watchdogs flex newfound muscle. The FSA’s latest guidance lands like a hammer, sparking a sell-off across DeFi and CeFi alike. Compliance costs skyrocket, squeezing margins thinner than a trader’s patience.

Technical Breakdowns

Network congestion returns. Gas fees spike, transaction finality slows, and the ‘future of finance’ suddenly feels like dial-up internet. Layer-2 solutions promise relief—just not today.

The Sentiment Shift

Fear replaces greed. Social sentiment indicators flash red as leveraged positions unravel. The crowd chases narratives one day, abandons them the next. Sound familiar? It should—it’s human nature wrapped in cryptographic packaging.

Today’s dip isn’t an anomaly; it’s the market’s immune response. Every correction purges weak hands and resets expectations. The revolution continues—just with a lower portfolio balance for now. Remember: in crypto, the only thing more volatile than the charts is investor psychology. Stay sharp.

Crypto Winners & Losers

On Thursday morning (UTC), all top 10 coins per market capitalisation have recorded price falls.

dropped by 7%, now trading at $70,884.

is down 7.7%, now changing hands at $2,097.

The highest decrease in the category is 10.6% by, now standing at $1.43.

It’s followed byfall of 9.1% to the price of $691.

Furthermore, of the top 100 coins per market cap, 92 have posted price drops today. Three of these saw double-digit pullbacks, including XRP.

fell 12% to $245.81, whiledecreased by 10.9% to $1.17.

At the same time,is the category’s best performer, having increased by 3.2% to $34.3.

is next. It appreciated 2% to the price of $0.01283.

Meanwhile, thehas moved over $22 million in BTC out of sovereign wallets over the past week alone. This triggered speculation over possible sell-offs.

noted that “from our observations, Bhutan periodically sells BTC in clips of around $50M, with a particularly heavy period of selling around mid-late September 2025.”

Bhutan is selling Bitcoin. pic.twitter.com/WDuUQmBZsU

‘Bitcoin Capitulation’

Nic Puckrin, investment analyst and co-founder of, commented that “as bitcoin continues its slide toward the psychological barrier of $70,000, it’s clear the crypto market is now in full capitulation mode.

“If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition from distribution to reset – and these typically take months, not weeks.”

Puckrin now expects BTC to fight to defend the $70,000 threshold. If it breaks below, it could be heading for its bear market low around $55,700-$58,200.

Moreover, Bitcoin whales are going for large-scale selling. Institutional outflows are increasing. Yet, while Bitcoin ETFs are seeing negative flows, the majority of ETF holders are sitting on paper losses, while Bitcoin OGs are doing most of the selling, per Bloomberg data.

“This is Bitcoin’s institutionalisation in action,” the analyst says.

Meanwhile, Puckrin also commented on the regulatory situation in the US, specifically when it comes to the much-anticipated Clarity Act.

“The rumours that crypto firms are discussing a stablecoin compromise for the Clarity Act that WOULD involve community banks are a clear sign that it is no longer an ‘us versus them’ situation.”

For a global stablecoin ecosystem to thrive, banks must be part of it. Therefore, “involving community banks is a smart MOVE – both politically and economically.”

Puckrin argues that community banks are more vulnerable to deposit flight but are nimbler and more open to innovation than larger institutional banks.

“They also carry real influence within Washington,” he says. “Turning them from an obstacle to part of the solution may well be the missing piece of the puzzle here.”

Levels & Events to Watch Next

At the time of writing on Thursday morning, BTC was trading at $70,884. The price saw a relatively gradual decrease from the intraday high of $76,472 to the intraday low of $70,119.

Over the past 7 days, BTC saw its price decrease by 19.3%. The highest point it recorded in this timeframe is $88,269.

Now that the price approached the $70,000 level, the critical floor stands at $68,400. A fall below this level would lead to $65,500. If it manages to reclaim $72,000 and the support-turned-resistance at $83,598, BTC could shift to a more bullish path.

At the same time, ethereum was changing hands at $2,097. The price decreased from $2,278 to $2,077 in a single day. It is now dangerously close to dropping below the $2,000 mark.

ETH is also down 28.8% over the past week. It moved between $2,083 and $2,947.

Another day of pullbacks would take ETH to the $1,990 level, followed by $1,930 and $1,850. Should it manage to reclaim the $2,250 and $2,320 levels, it could negate the bearish trend and move towards $2,500 and higher.

Moreover, the crypto market sentiment keeps falling lower within the extreme fear zone.

The crypto fear and greed index now stands at 11, down from 14 seen a day ago. This is the lowest level since 22 November 2025.

Sentiment reflects the market instability and volatility, as well as increasing general uncertainty. Yesterday’s minor increase in prices did nothing to abate fear among market participants.

ETFs See Another Day of Negative Flows

The US BTC spot exchange-traded funds (ETFs) closed the Wednesday session lower, with $544.94 million in negative flows. With this, the total net inflow fell below $55 billion to the current $54.75 billion.

Six of the twelve ETFs posted negative flows, and none saw inflows.let go of $373.44 million on 4 February.

recorded outflows of $86.44 million, followed by$41.77 million.

Additionally, the US ETH ETFs saw outflows on Wednesday as well, letting go of $79.48 million. The total net inflow decreased to $11.91 billion.

Of the nine funds, only two posted any flows, both negative.

let go of $58.95 million, followed by$20.53 million in outflows.

Meanwhile,, the Ethereum-treasury company led byTom Lee, is facing massive unrealized loss after a sharp drop in ETH prices.

As of 5 February, BitMine holds roughly 4.285 million ETH with a paper loss exceeding $7 billion, -45% on its holdings.

ETH just fell below $2,100.

Tom Lee(@fundstrat)'s #Bitmine holds 4,285,125 $ETH($8.42B) and is now sitting on over $7B in losses.https://t.co/7zjVRSk2ZO pic.twitter.com/jY96F0QpP9

Quick FAQ

The crypto market recorded another pullback in the last day. Also, the US stock market closed the Wednesday session lower, with some exceptions. By the end of trading on 4 February, thewas down 0.51%, thedecreased by 1.77%, and therose by 0.53%.

Short answer, yes. Longer answer: The prices are currently still trending lower. Yet, strong macroeconomic and geopolitical forces can still affect the market. The problem is, we can’t currently say in which direction.