Weekly Crypto Recap: Macro Panic Sell-Off

Crypto got punched in the face this week. From Jan 26 to Feb 2, 2026, geopolitical shocks and a tough Fed tone flipped the switch from confidence to chaos, then the market bled fast.

Bitcoin broke under $76,000 after holding above $90,000 days earlier. Total market cap sank to $2.54T, while 24-hour volume ripped to $168.91B as liquidations tore through leveraged positions. Tariff threats, U.S. shutdown risk, global trade friction, and rates staying high for longer kept pressure locked on.

This is the game’s rule. When macro turns hostile, crypto moves first and moves hardest. The flush feels brutal, but it also clears weak hands and resets positioning. If adoption keeps rising and institutional demand stays present, stabilization can follow once the panic exhausts itself.

Image 1: The Crypto Market Overview dashboard from CoinMarketCap captures the severe downturn, with total market cap at $2.54T and volume $168.91B. Top coins are deep in red: Bitcoin at $75,337.83 (down 4.06%), Ethereum at $2,192.36 (down 9.76%), BNB at $735.31 (down 5.71%), Solana at $97.84 (down 6.52%), and XRP at $1.5434 (down 6.93%). The Fear and Greed Index plummeted to 15 (Extreme Fear), Altcoin Season Index at 31 (Bitcoin Season), and the CoinMarketCap 20 Index at $155.26 (down 4.9%). The chart shows a steep reversal from January highs, underscoring the crash.

Price Updates for Major Coins

Price updates show who took the hardest hit and who held up best when panic hit the tape.

• Bitcoin (BTC): Opened near $86,670, then broke down hard, ending around $76,968. -4.06% (24h) and -11%+ (week) as tariff headlines and the Fed kept pressure on risk.
• Ethereum (ETH): Got hit harder than BTC, sliding to $2,270 for roughly -19% (week) as alt liquidity vanished fast.
• Solana (SOL): High beta got punished. Price fell to $100.79, about -15.2% (week) as leverage unwound.
• XRP: Dropped to $1.5908, around -13.34% (week). Policy optimism couldn’t compete with macro fear.
• BNB: Pulled back to $758.54, roughly -12.41% (week) as traders dialed down exchange exposure during volatility.

Bottom line: when macro turns hostile, correlations tighten and everything gets sold.

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 signaled deep distress.

Image 2: The CMC Crypto Fear and Greed Index cratered to 15 ("Extreme Fear"), Sentiment collapsed from neutral into panic. The reading sat at 18 yesterday, 34 last week, and 45 last month. The move puts the market back near its annual low zone, with 76 as the yearly high (May 2025) and 10 as the yearly low (Nov 2025). Price weakness and fear moved in lockstep.

Image 3: The CMC Altcoin Season Index at 31/100 ("Bitcoin Season"), up slightly: yesterday 32, last week 29, last month 23. Yearly high altcoin season 78 (Sep 2025), low Bitcoin season 12 (Apr 2025). The 90-day chart reflects volatility but persistent dominance.

Extreme fear often marks capitulation. It does not guarantee an immediate reversal, but it usually signals forced selling is peaking and the market is close to a reset point. 

Technical Breakdowns and Outlook

BTC flushed to $75,610, slicing through key support with aggressive sell volume and confirming extended bearish control. Momentum remains heavy. RSI sits in oversold territory, while MACD continues expanding lower, signaling sustained downside pressure rather than exhaustion.

Macro conditions reinforced the move. Tariff threats, shutdown risk, and a firm Federal Reserve stance pushed capital away from risk assets, tightening BTC’s correlation with equities. The hedge narrative limited deeper damage, but it did not stop the slide.

Structurally, $74,000 is critical support. A sustained break exposes $70,000. On the upside, reclaiming $80,000 would be the first signal of stabilization, opening space toward $85,000. Until structure shifts, strength is likely to meet supply.

Structure/Indicators: The ETH/USDT 1-hour chart shows a clear market structure breakdown, with price sliding from around $3,450 to roughly $2,194 as of February 2, 2026. Price is sitting well below all major moving averages, keeping the technical backdrop firmly in a sell regime. RSI is near 36.017, pointing to oversold conditions, while indicator alignment still leans “Strong Sell.” The volume profile also confirms the story, with heavy selling pressure and repeated volume surges throughout the downtrend.

Fundamentals/Macro: Ethereum remains highly sensitive to macro and regulatory shifts. A stronger U.S. dollar and more cautious institutional positioning have tightened liquidity, pushing markets into risk-off mode. Long-term fundamentals, including network activity, upgrades, and DeFi infrastructure, remain constructive, but the near-term tape is being driven by defensive flow and notable whale distribution, with large holders recently offloading billions of dollars worth of ETH.

Scenarios/Trade Plan:

• Bearish Scenario: If downside pressure persists and key support around $2,120–$2,050 fails, ETH likely grinds toward the psychological $2,000 level and potentially lower.
• Bullish Scenario: A real recovery requires reclaiming the structural and psychological barrier near $2,555. A sustained break above that zone can open upside targets around $2,800–$3,000.
• Trade Plan: With trends and signals still pointing down, caution is key. Short setups become more attractive on sharp relief rallies into nearby resistance, using tight stop losses given the elevated volatility.

Structure/Indicators: The SOL/USDT 1-hour chart shows a severe, extended downtrend, with price sliding from around $150 to roughly $99.11 as of February 2, 2026. Structure has broken beneath key support zones, and the volume profile reveals heavy participation around major psychological levels that now flip into firm overhead resistance. Indicators across timeframes remain decisively bearish. RSI sits near oversold levels at around 36.0, yet downside momentum is still active. Price is also trading well below key moving averages, keeping sellers in control. On the weekly view, price action may even be carving a bearish head-and-shoulders formation.

Fundamentals/Macro: Solana is highly reactive to macro shifts and changes in risk appetite, so broad risk-off flows have hit it hard. The decline was further intensified by ecosystem security concerns, including a confirmed Step Finance hack that sparked panic selling and added fuel to liquidation flows. Even so, network fundamentals remain resilient. Active addresses surged past 5 million in January 2026, and institutional interest continues to build around Solana’s scalability and low fees. Longer term, upgrades such as the Alpenglow protocol are viewed as potential tailwinds, but near-term price action is still dominated by fear and external pressure.

Scenarios/Trade Plan:

• Bearish Scenario: If the critical support near $96.40 (a high-volume node) fails, bearish momentum can extend toward the next major zone around $85.50, with a deeper slide toward $70.00 still on the table.
• Bullish Scenario: Stabilization requires reclaiming immediate resistance around $105.65, then pushing back above the psychological $116 level. A confirmed break above the $140–$150 cluster would be the clearest signal of a structural bullish reversal.
• Trade Plan: Trend conditions call for caution. Shorting relief rallies near resistance with tight stops can be a viable approach. Dip buying remains high risk under extreme fear and sustained sell pressure, so any long attempt demands strict risk management and clear invalidation levels.

Structure/Indicators: The XRP/USDT 1-hour chart reflects a sustained downtrend, with price falling from levels above $2.20 to roughly $1.55 as of February 2, 2026. Market structure has broken below prior support zones, and former demand areas now act as overhead resistance. Volume expanded during sell waves, confirming distribution rather than controlled pullbacks. RSI hovers near 30–35, signaling oversold conditions, yet momentum remains tilted lower. Price continues trading beneath key moving averages, reinforcing seller dominance across short-term timeframes.

Fundamentals/Macro: XRP remains sensitive to macro risk cycles and regulatory headlines. Broader risk-off flows have pressured altcoins, and global trade tension has weighed on payment-linked narratives. At the same time, ongoing discussions around regulatory clarity, including the CLARITY Act timeline, continue shaping sentiment. Institutional interest in cross-border settlement solutions provides structural support, but short-term flows are still driven by liquidity conditions and defensive positioning.

Scenarios/Trade Plan:

• Bearish Scenario: A decisive break below the $1.50–$1.55 zone opens room toward $1.40, with potential extension into deeper liquidity pockets if selling accelerates.
• Bullish Scenario: Recovery requires reclaiming $1.60 first, followed by a move back above the former supply zone near $1.90. Sustained strength above $2.00 would mark a meaningful structural shift.
• Trade Plan: Current trend favors selling strength into resistance while volatility remains elevated. Countertrend longs require confirmation through reclaim of key levels and disciplined risk management given prevailing downside momentum.

Macroeconomic Backdrop

Crypto sold off as macro pressure intensified across multiple fronts. Geopolitical tension climbed, inflation held firm, and labor momentum cooled, pushing global investors into defensive positioning. When liquidity tightens and policy uncertainty rises, capital rotates away from volatile assets, and digital markets respond quickly.

Market behavior reflected repositioning rather than structural collapse. Funds reduced exposure to high-beta instruments while increasing allocations to safer stores of value. Short-term volatility expanded because leverage unwound rapidly, amplifying price swings across the board.

Geopolitical Escalation

Risk appetite weakened as political friction spread. In the United States, renewed tariff threats toward Canada resurfaced while shutdown concerns grew ahead of a February 7 funding deadline. Trade rhetoric combined with fiscal uncertainty elevated the global risk premium and pressured cross-border capital flows.

Abroad, expanded trade cooperation between the European Union and India signaled strategic realignment amid shifting power dynamics. The Greenland agreement involving Denmark, U.S. involvement, and NATO investment commitments stirred political debate inside Europe. At the same time, renewed U.S.–Iran confrontation heightened oil supply concerns. Together, these developments intensified caution across financial markets.

Flight to Safety

Capital rotated decisively toward traditional hedges. Gold approached $4,562 per ounce and silver neared $80 before modest pullbacks. Portfolio managers favored assets perceived as stable during geopolitical strain and policy tension.

Digital assets moved in the opposite direction. Liquidity stress pushed participants to reduce risk exposure across correlated markets, leading to synchronized declines between equities and crypto during peak uncertainty.

Federal Reserve and Inflation

The Federal Reserve maintained its benchmark rate at 3.50%–3.75%, reinforcing expectations for restrictive financial conditions. Updated projections pointed toward limited rate reductions in 2026, keeping borrowing costs elevated and capital allocation selective.

Inflation readings reinforced caution. Consumer prices rose 0.4% month over month versus 0.3% expected, with annual headline inflation at 2.7% and core at 3.3%. Elevated price growth reduced easing expectations and supported a stronger dollar, creating headwinds for risk-sensitive assets.

Labor and Consumer Stress

Employment data showed moderation. ADP payrolls increased 41,000, while nonfarm payrolls rose 50,000 compared with expectations of 73,000. Unemployment edged up to 4.4%, and wage growth printed 0.3% month over month. Slower hiring combined with sticky inflation reinforced cautious positioning among investors.

Household balance sheets also faced pressure as student loan garnishments resumed across roughly $1.6 trillion in balances. Mortgage rates near 5.99% constrained housing activity despite significant institutional property purchases. China’s CPI at 0.8% reflected subdued demand, contributing to uneven global growth dynamics.

Institutional Flows

Institutional participants adjusted exposure without abandoning strategy. Bitcoin ETFs recorded approximately $486 million in outflows, and Ethereum ETFs saw $159 million exit during the downturn. These moves reflected tactical repositioning amid volatility.

Broader flow trends remain constructive, with early 2026 net inflows exceeding $1.2 billion. Selective capital entered Solana ETFs at +$13.64 million and XRP-linked products at +$8.72 million. Asset managers continued expanding allocation guidance, custody solutions, and compliance infrastructure, signaling sustained engagement.

Corporate and Sovereign Accumulation

Long-term allocators continued accumulating digital reserves. MicroStrategy added 1,287 BTC, bringing total holdings to 673,783 BTC valued around $60–61 billion. El Salvador increased national reserves toward roughly 7,500 BTC, while additional Asia-based firms maintained incremental purchasing programs.

Multi-year treasury strategies provide structural demand during corrective phases. Strategic buyers operate independently of short-term sentiment swings, contributing stability during periods of retail-driven volatility.

Policy and Structural Themes

Regulatory clarity progressed gradually. The CLARITY Act remained under discussion in the United States with a Senate vote scheduled for January 15. Florida signaled plans for a Bitcoin reserve by July 2026. The United Kingdom outlined comprehensive crypto licensing plans for 2027, and Lloyds Banking Group completed a tokenized bond transaction, demonstrating institutional blockchain integration.

Cycle dynamics continue evolving as institutional capital moderates extremes. Ethereum’s scaling roadmap strengthens settlement-layer capacity, while tokenization and stablecoin payment growth expand practical adoption across financial rails.

Conclusion

Recent volatility reflects macro compression rather than systemic breakdown. Geopolitical tension, restrictive monetary policy, persistent inflation, and softer labor momentum created conditions favoring defensive allocation.

Underneath price swings, structural adoption, institutional infrastructure, and regulatory progress advance steadily. Investors benefit from distinguishing short-term macro-driven repricing from longer-term transformation shaping digital asset markets.