Bitcoin Breaks Below $76k. Will February Bring Relief?

Bitcoin is experiencing one of its biggest losses this week. As it stands, it is heading toward its second-largest dip since November on a 1-week scale.

Volatility continued into the weekend as the apex coin is on the move again. It opened on Saturday at $84,124 and has since declined, dropping below $81,000 a few hours ago.

In hindsight, BTC retraced to a low of $80,500 in November. It retested the low a few minutes ago, but bounced off the mark. It remains to be seen whether the bulls will stage a buyback at this level in the coming hours.

Rally or not, traders lost over $658 million in the derivatives market in the last 24 hours. The bulk of losses were from long positions, which accounted for more than 95%. The latest losses bring the total in the last 24 hours to over a billion.

On the 4-hour chart, the bulls are looking to halt the decline, evidenced by the doji representing current price action. Nonetheless, it remains to be seen if they will succeed.

Looking back at how prices trended over the last 30 days reveals that the apex coin broke out of its rangebound movement, surging to new highs. It gained more than 10% during the first 14 days of January, peaking at $97,939.

In response to the massive surge, several bullish speculations emerged, with some asserting that a move to $250k in 2026 was inevitable.

The First Sign of Trouble

A sudden downtrend began on the fifteenth day and continued for the next five days. Bitcoin lost over 9% during this period. The massive decline was no surprise as geopolitical tension and other bearish fundamentals were at play.

However, in response to the retracement, one analysis noted a chart pattern on the 1-week chart that will remain in play through February. While commenting on the rise in Bitfinex’s long open interest, it pointed to a bearish flag and noted that if the coin opened another candle below the pattern, it would signal further decline.

Typically, a bearish flag signals a short-term break from a downtrend that will resume. Bitcoin is printing its second consecutive candle on this scale, confirming that further decline is almost inevitable in the coming days.

The break below the flag casts a dark, foreboding shadow over how prices will play out in the next 28 days. However, there are other factors to consider before marking February a bearish month.

Bitcoin Selling Pressure

A recent report from Glassnode suggests that the hike during the first half of January was an exit strategy for the whales. A previous article noted that the surge was capped as short-term holders sold their bags. They were primarily responsible for ending the uptrend.

However, long-term investors also recognised that the surge would not provide the desired result. So they joined the selling frenzy. In the end, reports indicate they spent over 370k BTC in the last 30 days. This means that, on average, they spent 12k BTC per day,

Due to the selling action, the net yield of the long-term cohort dropped to one of its lowest values in the past year.

While the selling continues, the retail demand is collapsing. It means that the demand for the apex coin has declined: a recipe for massive declines in the coming weeks.

Aside from these factors, recall that a previous analysis noted that for Bitcoin to sustain an uptrend, total supply in profit must surge above 75%. The figure has plummeted following the latest dump. More pressure will be on holders to selloff at the sight of any slight recovery.

In summary, several onchain data are currently negative, suggesting that the coming month will be no better than January.

Bitcoin Could Surge in the First Half

Bitcoin plummeted even lower during writing, dropping to a low of $75,555. The apex coin has rebounded and trades at $1k higher. However, it is down by almost 11%. It is arguably having its biggest single-day dip. As a result, BTC will end January with losses exceeding 11%.

Rumors of several explosions in Iran were the reason for the latest plunge. However, major news outlets have since debunked these claims, ending speculations that the US or Israel staged any attack on the Middle Eastern country.

The market is not out of the woods yet, as the political analysts warn that the attack is inevitable. BTC and the rest of the market will see further decline if this happens.

However, if fundamentals remain flat, the apex coin may start recovering during the first half of February. Historical data also suggests this may be the case, as the next month is more profitable than the current one.

The asset gains an average of 14% during this period, compared with 8% in January. If the trend holds this time, BTC may be gearing up for further increases at the time of writing.

Aside from historical data, the relative strength index dropped below 30 for the first time since November. Being oversold, a rebound and subsequent recovery are almost inevitable. Additionally, the apex coin is currently trading outside its bollinger bands, suggesting an impending uptrend.

Going by the BB, BTC will reclaim $80k in the coming days and attempt $85k later. However, a surge to $90k is unlikely if market conditions remain the same. 

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