Bitcoin Price Decline Intensifies as Liquidity Dries Up Amid Macroeconomic Uncertainty
Bitcoin’s price has experienced a significant downturn in the last 12 hours, falling to approximately $74,600 in early Asian trading on February 4, 2026. This sharp sell-off, which forced many out of leveraged positions, indicates a drying up of liquidity in the market and a deepening of investor fear. The cryptocurrency market has seen a total value evaporation of approximately $467.6 billion since January 29, according to CoinGecko data. This broad market weakness is attributed to a confluence of macroeconomic uncertainties and a general risk-off sentiment among investors.
Market and Technical Breakdown
The total cryptocurrency market capitalization has seen a substantial decline, now standing at approximately $2.65 trillion, a -2.27% change in the last 24 hours. Bitcoin’s dominance, however, remains robust at 57.4%, with Ethereum holding a 10.3% share of the market. The 24-hour trading volume across all tracked cryptocurrencies is around $183 billion, suggesting a significant reduction in overall market activity compared to previous periods. On-chain data and protocol-level factors are not yet indicating a bottom, with many analysts pointing to the continued outflow of capital and the liquidation of long positions as key indicators of ongoing bearish pressure. The recent price action has seen Bitcoin fall to its lowest level since US President Donald Trump won the re-election in early November 2024.
Live Market Data
As of February 4, 2026, Bitcoin is trading around $75,753.00, marking a -3.01% decrease in the last 24 hours. Its 24-hour trading volume is approximately $34.27 billion. The 7-day average trading volume is not readily available but the significant drop in Bitcoin’s price suggests increased selling pressure. Ethereum, the second-largest cryptocurrency, is priced at $2,270.90, down -2.89% in the past 24 hours with a trading volume of $22.61 billion. Solana has seen a steeper decline, trading at $97.04, down -7.25% in the last 24 hours with a trading volume of $6.51 billion.
Sentiment and Positioning
Market sentiment appears to be heavily skewed towards fear, as indicated by the Crypto Fear & Greed Index, which has shown a steady decline and is hovering around 15 points, firmly within “extreme fear” territory. This reflects very fragile confidence and an environment unfavorable for a near-term recovery in demand. Data from CoinGlass shows that in the past 24 hours, approximately 196,969 traders were liquidated, with total liquidations reaching $822.09 million. Institutional activity, as reflected by ETF flows, has also seen a reversal, with significant outflows reported. While BlackRock’s Bitcoin ETF has seen substantial inflows in the past, recent market conditions suggest a shift. Analyst sentiment, as observed on platforms like X, suggests caution, with many viewing the current decline as cyclical but necessitating a rebalancing phase to flush out excessive leverage.
Contrarian / Bear Case
The primary downside risks revolve around continued macroeconomic uncertainty, particularly concerning inflation and interest rate policies. The recent surge in US manufacturing PMI, while signaling economic expansion, also reignites inflation fears, potentially leading the Federal Reserve to maintain restrictive monetary policies for longer. This would keep liquidity tight and speculative assets subdued. Furthermore, the ongoing geopolitical tensions and regulatory scrutiny surrounding cryptocurrencies, including concerns about Iran’s crypto activity for sanctions evasion, add to the uncertainty. The substantial amount of leverage within the market, evidenced by the high liquidation figures, also presents a significant risk, as further price drops could trigger cascading liquidations, exacerbating the downturn.
Short-Term and 30-Day Outlook
Bullish Scenario (20% Probability): A rapid de-escalation of macroeconomic concerns, coupled with positive regulatory developments, could trigger a swift recovery. Strong institutional inflows into Bitcoin ETFs, signaling renewed confidence, would be a key indicator.
Neutral Scenario (40% Probability): The market may enter a period of consolidation, with prices trading within a defined range as investors digest incoming economic data and await clearer directional cues. Volatility is expected to persist.
Bearish Scenario (40% Probability): Continued macroeconomic headwinds, persistent inflation fears, and a lack of significant regulatory clarity could lead to further price declines. Additional significant liquidations and a sustained “extreme fear” sentiment would solidify this outlook.
Conclusion
Investors should closely watch for shifts in macroeconomic indicators, particularly inflation data and central bank policy statements. The outcome of ongoing regulatory discussions surrounding cryptocurrencies will also be crucial. A sustained price drop below the $70,000 level, coupled with a significant increase in selling volume, would invalidate the current narrative of a cyclical correction and suggest a deeper downturn. This event matters beyond just price, as it tests the resilience of the cryptocurrency market and its ability to withstand broader economic shocks, while also highlighting the ongoing evolution of digital assets as a distinct asset class. The integration of crypto into traditional finance, exemplified by products like BlackRock’s planned premium income ETF, is a significant development to monitor for long-term market structure changes.