Bitcoin Breaks Major Support — Extreme Fear or Another Leg Down?

Feb 6

Bitcoin(BTCUSDT), as I highlighted in my previous weekly idea, started its decline. The drop came with higher momentum than expected, surprising many, and it successfully broke the heavy support zone($78,260-$64,850).

Now, here are the fundamental reasons for Bitcoin’s movement in the last 24-48 hours, as well as the general context:

•Global Risk-Off Sentiment: Investors moved away from high-risk assets as global equity markets—especially tech stocks—came under heavy selling pressure.

•Lack of Strong Spot Demand: There was no meaningful inflow of fresh capital to absorb selling pressure at key support levels.

•Institutional Pressure & Unrealized Losses: Large BTC holders and public companies with Bitcoin on their balance sheets reported increased unrealized losses, weakening market confidence.

•Correlation With Traditional Markets: Bitcoin continued to trade as a risk asset, following the downside momentum of global financial markets.

•Forced Liquidations: High leverage across the market led to cascading liquidations, accelerating the downside move.

Bitcoin Fear & Greed Index is currently at 9 — marked as “Extreme Fear”.

This is the lowest reading since June 2022, when the market sentiment collapsed following major events like the Terra crash.

Historically, when the Fear & Greed Index dropped this low, Bitcoin experienced prolonged selling pressure and volatility, followed by eventual stabilization as fear subsided. Extreme Fear readings often coincide with market bottoms or oversold conditions, but they do not guarantee an immediate price reversal.

In short: Extreme fear can signal that market participants are overly pessimistic — possibly a contrarian buying environment — but confirmation from price action and other indicators is crucial before assuming a trend reversal.

Now, let’s take a quick look at Bitcoin’s 4-hour chart to assess the current situation.

It appears that Bitcoin, given its momentum, has successfully broken the heavy support zone($78,260-$64,850) and is currently pulling back toward that zone.

From an Elliott Wave perspective, it seems we are in the final stages of the main wave 4. After this pullback near Fibonacci levels, we anticipate another decline. Since the drop’s momentum has been strong, wave 5 could potentially be truncated.

I expect Bitcoin to resume its drop from one of the Fibonacci levels or Cumulative Short Liquidation Leverage($68,900-$67,200), targeting at least $64,123.

First Target: $64,123

Second Target: $62,103

Stop Loss(SL): $72,033

Points may shift as the market evolves

Cumulative Long Liquidation Leverage: $60,000-$58,000

CME Gap: $84,560-$79,660

CME Gap: $54,545-$52,980

💡 Please respect each other's opinions and express agreement or disagreement politely.

📌Bitcoin Analysis (BTCUSDT), 4-hour time frame.

🛑 Always set a Stop Loss(SL) for every position you open.

✅ This is just my idea; I’d love to see your thoughts too!

🔥 If you find it helpful, please BOOST this post and share it with your friends.

Feb 6

Note

As we’ve seen over the past few days, Bitcoin is showing a strong correlation with the S&P 500 (SPX500).

At the moment, SPX500 is pushing higher, and we can clearly see its bullish impact reflected in Bitcoin’s price action.

However, as long as Bitcoin fails to reach and properly test the $73,000 level, the risk of a renewed pullback remains on the table.

This zone is still acting as a key threshold that must be reclaimed to confirm continuation.

Until then, volatility and corrective moves should be expected.

Please manage your risk carefully and avoid overexposure.

Feb 7

Note

So, yesterday, Bitcoin found solid footing and thus began an upward move. As financial markets reopened, Bitcoin resumed its bullish trend, and since overall trading volume on Saturdays and Sundays is low, we can’t really expect major moves. Therefore, unless a significant catalyst occurs, I wouldn’t expect a lower bottom—like $60,000—within the next 48 hours. In fact, we might see Bitcoin remain in a defined upward trend.

Additionally, in the past couple of days, some news about potential tensions or possible agreements between Iran and the U.S. has emerged. Any sudden headline on that front could introduce market volatility, so it’s wise to be prepared for that scenario. Overall, though, if you have a short position, you might consider closing it. Cumulative Long Liquidation Leverage($65,920-$64,000) and wait for a long trigger.

Cumulative Long Liquidation Leverage($60,920-$58,000)

Cumulative Short Liquidation Leverage($71,910-$69,790)

Feb 8

Trade active

Short Position was activated

Cumulative Long Liquidation Leverage($67,650-$66,670)

Cumulative Long Liquidation Leverage($65,980-$65,000)

Cumulative Short Liquidation Leverage($72,980-$71,5000)

Feb 9

Note

If you open the Short position @ Cumulative Short Liquidation Leverage($72,980-$71,500), you can risk-free your position.

Feb 11

Trade closed: target reached

First Target Done