Weekly Crypto Recap: Severe Crash as Global Sell-Off Hits Markets

The week of February 2 to February 9, 2026 was one of the most turbulent in recent memory for the cryptocurrency market, as a massive global sell-off triggered sharp declines across all major assets. Bitcoin led the plunge, crashing from above $75,000 to lows near $60,000 amid panic selling, while altcoins suffered even steeper losses. Total market capitalization tumbled to $2.39 trillion, with liquidations exceeded $2.6 billion. The downturn was sparked by fears of a US government shutdown by February 7 if no funding deal is reached, compounded by Trump's tariff threats on Canada and ongoing EU-India trade shifts. Despite the bloodbath, late-week stabilization emerged as buyers stepped in, with Bitcoin recovering slightly. For those new to crypto, crashes like this can be intimidating, but they often represent capitulation points where smart investors accumulate—history shows recoveries follow when fundamentals like adoption remain strong. While market sentiment has plummeted into extreme fear, gold's recent rally underscores Bitcoin’s potential as a comparable hedging asset during times of macroeconomic instability.

Image 1: The Crypto Market Overview dashboard from CoinMarketCap vividly depicts the week's carnage, with total market cap at $2.39T and volume $91.9B. Top coins are mostly red: Bitcoin at $70,241.82 (+1.39%—recovering slightly), Ethereum at $2,067.43 (-1.2%), BNB at $636.43 (-1.95%), Solana at $86.33 (-1.68%), and XRP at $1.4233 (-0.6%). The Fear and Greed Index plunged to 9 (Extreme Fear), Altcoin Season Index at 24 (Bitcoin Season), and CoinMarketCap 20 Index at $144.18 (+0.54%). The chart shows a steep downward trajectory from January highs, emphasizing the crash's intensity.

Price Updates for Major Coins

Price updates are a great way to track how individual coins are performing relative to the broader market. Here's a straightforward look at the key players this week:

• Bitcoin (BTC): Opened near $75,000 but cratered amid sell-off, hitting lows around $60,000 before a modest rebound to $70,241. Weekly losses ~8%, driven by shutdown fears.
• Ethereum (ETH): Fell sharply to $2,067, erasing gains as risk aversion hit harder, but held above $2,000.
• Solana (SOL): Dropped to $86.33, high-beta nature amplified losses despite ecosystem resilience.
• XRP: Declined to $1.4233, policy hopes tempered impact but global tensions weighed.
• BNB: Slid to $636.43, reflecting exchange caution in volatility.

These moves underscore crypto's sensitivity to macro—dips offer entry points for believers.

Market Overview: Sentiment Enters Neutral Territory

Market indicators are like gauges on a car's dashboard—they tell you the overall health and mood of the crypto space. This week, they flashed red alerts.

Image 2: The CMC Crypto Fear and Greed Index hit 9 ("Extreme Fear"), a sharp drop, with values: yesterday 15, last week 18, last month 34. Yearly high greed 76 (May 2025), low extreme fear 5 (Feb 6, 2026). The chart correlates with Bitcoin's crash, showing panic levels.

Image 3: The CMC Altcoin Season Index at 24/100 ("Bitcoin Season"), down: yesterday 22, last week 32, last month 29. Yearly high altcoin season 78 (Sep 2025), low Bitcoin season 12 (Apr 2025). The 90-day chart reflects alts underperforming.

Extreme fear signals potential bottoms—buying here has historically paid off.

Technical Breakdowns and Outlook

Market Structure and Technical Indicators

The market structure has undergone a severe breakdown, with Bitcoin plunging from its recent $80,000 range to a critical low near $60,074 on February 6, 2026. This move triggered a massive $2.6 billion liquidation event. Technically, the price has completed a three-wave corrective cycle consistent with an Elliott ZigZag 5-3-5 model, now entering a "distribution phase" characterized by high-volume selling on rallies. Key indicators reflect this extreme stress: the RSI daily has dipped into extreme oversold territory (near 33), while the MACD remains deeply bearish, signaling that while a relief bounce is possible, the path of least resistance remains downward until major EMA levels are reclaimed.

Fundamentals and Macro Context

The primary catalyst for this downturn is a "perfect storm" of macroeconomic headwinds dubbed the "Warsh effect". The nomination of Kevin Warsh, a known hawk, as the next Fed Chair has shifted expectations toward tighter monetary policy for longer, fueling a broad risk-off sentiment. Additionally, the market is grappling with a U.S. government shutdown, threats of 100% tariffs on Chinese goods, and a sharp correction in the AI software sector. While Bitcoin's correlation with stocks has amplified during this rout, a simultaneous surge in gold as a hedge highlights a growing divergence; institutional "dip-buying" is emerging as long-term holders see value after a 45% drawdown from the October peak, potentially limiting a total collapse.

Scenarios and Trade Plan

Bearish Scenario: If Bitcoin fails to hold the psychological $70,000 level on a daily close, the next major structural support sits in the $60,000–$65,000 range. A breach here could open the doors to a "capitulation wick" toward $50,000.

Bullish Scenario: A sustained recovery above $75,000 is required to neutralize the immediate bearish bias, with $80,000 serving as the first major target for a trend reversal.

Trade Plan:

• Short: Enter below $72,000, targeting $68,000 with a strict stop-loss at $73,000.
• Buy: Consider "capitulation buys" near $62,000 with tight stops below $60,000, looking for a relief bounce toward the 20-day EMA near $86,000.

Market Structure and Technical Indicators

Ethereum has undergone a severe structural breakdown, plummeting to $2,069.13 and decisively shattering its previous trading channel. This collapse was driven by high-volume panic selling, creating a massive "supply overhang" near the $2,200 level. The price has now transitioned into a distribution phase, where it oscillates at lower levels as traders reassess the trend. Technically, the Bollinger Bands daily have widened significantly, signaling extreme volatility, while the Stochastic RSI has hit rock bottom. Although these indicators suggest the sell-off is stretched, the dominant bearish momentum indicates that any recovery will face stiff resistance at previous breakdown points.

Fundamentals and Macro Context

The fundamental landscape for Ethereum is currently battered by a global risk-off environment. Persistent inflation data has fueled expectations of "higher-for-longer" interest rates, causing capital to flee higher-beta assets like altcoins. While Ethereum's long-term value remains supported by roadmap milestones such as ZKEVM integration and PeerDAS (data availability) upgrades, these are currently overshadowed by macro headwinds. The "altcoin drain" is evident as ETH continues to lose ground against safer havens, leaving the price vulnerable to further liquidity flushes if broader market sentiment doesn't stabilize.

Scenarios and Trade Plan

• Bearish Scenario: A sustained break below the $2,000 psychological floor would likely accelerate a drop toward the $1,800 support zone, where historical buying interest is strongest.
• Bullish Scenario: To invalidate the immediate downtrend, ETH must reclaim and hold above $2,200, which would open the path for a relief rally toward the $2,400 liquidity pocket.
• Trade Plan: The primary strategy is to sell rallies near the $2,100–$2,120 zone, with a stop-loss at $2,150 and a target of $1,950. For long-term players, accumulating at major supports (around $1,850) with tight stops is preferred to catch a potential capitulation bounce.

Market Structure and Technical Indicators

Solana has suffered a complete range obliteration, crashing from its late-2025 highs to a current price of $86.35. The 1-hour chart shows a series of sharp liquidation spikes as the price breached psychological levels, including the critical $100 support. Technically, the asset is in a precarious position, having confirmed an EMA "death cross" with the price trending below all major moving averages. The ADX (Average Directional Index) remains elevated, indicating a strong and persistent downward trend, while the volume profile shows massive sell-side pressure during the recent plunge. 

Fundamentals and Macro Context

The fundamental outlook for SOL is heavily clouded by a major class-action lawsuit involving Solana Labs, the Solana Foundation, and the meme coin launchpad Pump.fun. Allegations include securities law violations and concerns over insider manipulation of the validator system, which has severely battered investor confidence. From a macro perspective, Solana's high-beta nature has made it particularly vulnerable to geopolitical tensions and "higher-for-longer" interest rate expectations, leading to significant capital outflows as traders pivot toward lower-risk assets like Bitcoin. 

Scenarios and Trade Plan

• Bearish Scenario: If the price fails to reclaim the $90 level, a continued slide below $85 is likely, with the next major historical demand zone sitting between $80 and $75.
• Bullish Scenario: A sustained move and daily close above $90 would be the first sign of stabilization, potentially opening a path for a relief rally toward the $95–$100 resistance area.
• Trade Plan:
  • Short: Enter on a break below $88, targeting $82 with a stop-loss at $90.
  • Buy: Consider tactical "dip buys" only if the $80 support holds firmly, using tight stops to manage volatility from ongoing legal developments.

Market Structure and Technical Indicators

The market structure for XRP has transitioned into a precarious distribution phase after a sharp drop to $1.4234, testing multi-month support. The provided 1-hour chart shows the price struggling below the VWAP, indicating that short-term sellers currently control the volume-weighted average price. Technical indicators confirm this weakness: the RSI is trending low (near 27-35 on higher timeframes), signaling deeply oversold conditions but lacking a clear reversal spark. While the volume has thinned on these lows—often a sign of seller exhaustion—the persistent bearish structure suggests that the previous $1.50 support floor has now flipped into a formidable ceiling. 

Fundamentals and Macro Context

XRP's fundamental outlook is currently weighed down by global trade tensions and broader risk-off sentiment in the cryptocurrency market. However, significant optimism remains tied to the CLARITY Act, a key piece of U.S. legislation aimed at providing a definitive non-security classification for digital assets like XRP. While the act's recent delays have caused some short-term "sideways" frustration, the underlying institutional groundwork—including over $1.3 billion in ETF inflows since late 2025—provides a potential long-term buffer against a total market collapse. 

Scenarios and Trade Plan

• Bearish Scenario: A decisive failure to hold the $1.40 psychological level could trigger a secondary flush toward $1.30 or even $1.25, where the next major historical demand zone resides.
• Bullish Scenario: XRP must reclaim the $1.50 level to neutralize immediate bearish pressure, with a breakout above $1.60 required to target the next liquidity zone near $1.70.
• Trade Plan:
  • Tactical Short: Sell into relief rallies up to $1.45, with a stop-loss at $1.48 and an initial target of $1.35.
  • Strategic Long: Consider "policy-driven" long positions if the $1.40 floor holds firmly, anticipating a sharp "uncoiling" rally once regulatory clarity from the CLARITY Act is officially finalized.

Macroeconomic Backdrop: Geopolitical Shock, Fed Caution, and Consumer Pressures

The larger economic and global picture heavily influences crypto, as it affects how much risk investors are willing to take. This week was marked by a cascade of high-stakes events leading to a global sell-off.

Geopolitical risks peaked with Trump's tariff threats: He warned of 100% duties on Canada over immigration and trade issues, amid US government shutdown fears if no funding deal by February 7. This followed EU-India trade agreements aimed at countering US dominance, adding to transatlantic strains. The Greenland saga evolved with a landmark deal—Denmark ceding control for US/NATO investments—but not before sparking EU retaliation discussions. US-Iran clashes intensified with strikes, threatening oil supplies and boosting safe-havens. Gold/silver hit ATHs early ($4,562 gold, $80 silver) before correcting, opposite to crypto/stocks which sank.

The Fed held rates at 3.50%-3.75%, hawkish despite data, projecting minimal 2026 cuts. Powell's insider probe continued; Cook's speech emphasized inflation vigilance. CPI 0.4% monthly (vs. 0.3%) pushed annual 2.7%, core 3.3%.

Jobs weak: ADP 41k, non-farm 50k (vs. 73k), unemployment 4.4%. Wages +0.3%. Student debt garnishments on $1.6T burden. Real estate stagnant at 5.99% rates despite $200B buys.

China's 0.8% CPI added pressure. For beginners, macro storms cause dips but highlight crypto's hedge potential.

Institutional Inflows: Reversed to Strong Positives with Growing Adoption

Big institutions bring credibility and steady money to crypto, making it more appealing for everyday investors.

Flows turned negative amid crash: Bitcoin ETFs outflows but early 2026 net +$1.2B. Ethereum similar, Solana +$13.64M, XRP +$8.72M. Balchunas noted momentum.

Bank of America recommends ETFs (1-4%). Morgan Stanley wallet mid-2026 for BTC/ETH/SOL/tokenized. PwC auditing expands.

Corporates: MicroStrategy +1,287 BTC; El Salvador 7,500 BTC. Metaplanet buys.

Policy Wins: Regulatory Momentum Accelerates Globally

Clear rules are essential for crypto's growth, and this week saw progress that could make the market safer and more accessible.

US CLARITY Act delayed but expected; Senate January 15 vote. Florida Bitcoin reserve July 2026. UK 2027 licenses. Lloyds tokenized bond buy.

Specific Themes: Cycle Evolution, Tokenization, and Multi-Chain Future

Key ideas highlight crypto's future.

Bitcoin cycle: Flat 2025, $250k 2026 forecasts. Ethereum upgrades solve trilemma. Tokenization: Polymarket-Dow Jones, Morgan Stanley. Stablecoins +525% Visa.

Zcash team exit risks small projects.

Other News: Resilience, Upgrades, and Everyday Adoption

Beyond the headlines, several stories added color to the week.

Discord filed for an IPO, potentially valuing at billions. Rumble launched a non-custodial wallet for tips in Bitcoin, USDT, and gold tokens. The IMF adopted a pragmatic stance on Bitcoin. Mining profitability is low, but national adoption like El Salvador's continues.

Ethereum's blob capacity increased to 21, and gas limit proposals to 80 million promise cheaper transactions. AI discussions highlighted productivity gains but slower hiring—crypto-AI crossovers could emerge.

These illustrate crypto's integration into daily life.

Conclusion: Extreme Fear and Potential Bottom Formation

The week of February 2–9, 2026 marked one of the most severe sell-offs in recent memory, with Bitcoin crashing below $70,000 and the total market cap dropping to $2.39 trillion amid extreme fear (Fear & Greed Index at 9). Geopolitical shocks—US government shutdown risks, 100% tariff threats on Canada, and lingering US-EU tensions over Greenland—combined with the Fed's hawkish rate hold and weaker jobs data, triggered widespread panic and massive liquidations. Altcoins suffered even steeper losses, reinforcing Bitcoin's dominance in this risk-off environment.

Yet, beneath the surface, signs of resilience emerged: late-week buying at lows, continued institutional inflows (early 2026 net positive), and policy tailwinds like the anticipated CLARITY Act passage signal that fundamentals remain intact. Gold and silver hitting ATHs while crypto bled highlights BTC's evolving role as a hedge, though high-beta alts bore the brunt.

Extreme fear historically marks capitulation points—opportunities to accumulate quality assets like Bitcoin and Ethereum on deep dips. Patience is key: macro storms pass, and adoption trends (tokenization, stablecoins, upgrades) continue to build a stronger foundation.

Key Guidance: Buy selectively on oversold levels, keep risk small, focus on education, and monitor Fed/shutdown developments. Crypto's long-term story remains compelling—discipline now positions for the next leg higher.