Bitcoin’s struggle to reclaim the $70,000 barrier has brought back a familiar question across markets: could the downturn deepen? On Monday, a brief attempt to recover this key level quickly faded under selling pressure, sending price down to $67,000. As of Wednesday morning, Bitcoin is trying to stabilize near $68,000, but slipping below short-term supports has made the technical outlook increasingly uncertain.

Three Micro Factors Increasing Downside Risk

Three short-term drivers are currently amplifying downside pressure on Bitcoin. While none of them is decisive on its own, together they suggest the near-term risk balance is tilting lower.

First, the failure to secure sustained closes above $69,400 highlights weak buyer conviction, turning each rebound into a potential selling opportunity.

Second, new capital inflows into spot Bitcoin ETFs have slowed noticeably. This points to fading institutional appetite and limits the price’s underlying support.

Third is a liquidity gap in derivatives markets. Concentrated stop orders between $66,000 and $64,000 increase the risk of cascading sell-offs if that zone breaks.

Key Levels and Market Reaction

The loss of the $68,000–$70,000 range — which looked almost fortress-like in early February — represents more than just a numerical shift. It marks a psychological reset for the market. Analysts broadly agree that every day spent below this zone dampens buying interest and turns existing positions into exit opportunities.

While major cryptocurrencies lag, smaller tokens have managed brief rallies. Over the past seven days, Bitcoin, Ethereum, and BNB are down roughly 3%, while Zcash (ZEC) and Cosmos (ATOM) posted gains approaching 20%.

That divergence may not last. Alex Kuptsikevich, speaking on behalf of FxPro, warned:

“The decline in the largest cryptocurrencies is an ominous sign for smaller ones, as it could soon drag them down at an accelerated pace.”

On-Chain Data and Market Stress

According to analysts at CryptoQuant, the market has entered a full-scale “stress” phase. Major capitulation losses that typically mark cycle bottoms have not yet materialized, suggesting the unwinding process may still be incomplete.

Concerns around quantum computing risks and network “spam” debates are also weighing on sentiment. Adam Back, CEO of Blockstream, criticized the BIP-110 proposal, arguing that rule changes could introduce new reputational risks.

Institutional Flows and ETF Moves

Institutional investors are adjusting exposure. Harvard University’s endowment reduced its Bitcoin ETF holdings by more than 20% in the fourth quarter. Although it still maintains one of its largest positions, the move has drawn market attention.

Technical Outlook and Possible Scenarios

Based on our own analysis, Bitcoin’s critical support currently sits near $66,600. While price appears to have bounced from this level, a reaction alone is not enough. A move above $69,400 is needed for confirmation.

Until that level is reclaimed, the current move remains a short-term rebound rather than a strong buying signal.

If $69,400 is cleared, the next major resistance comes in near $72,000. This zone marks recent local bottoms and has capped price action for roughly 15 days. Reclaiming it could ease selling pressure and support short-term momentum.

Bitcoin Price (BTC): $67,846 — volatility near 12%.

As Bitcoin continues searching for direction, every weak rebound keeps one question alive across the market: is there still another dip ahead?

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As of February 18, 2026, markets are fully locked on messages from the Federal Reserve. The minutes will not only reflect what policymakers said — they will determine how far traders shift their interest-rate projections.

Crypto crawl boost paragraph

Crypto markets have entered a high-volatility window ahead of today’s FOMC minutes, with Bitcoin futures open interest rising and spot volumes accelerating across major exchanges. Traders are watching Fed language closely for rate-cut clues, as short-term positioning in BTC and altcoins has become increasingly sensitive to shifts in monetary policy expectations.

With the U.S. session approaching, algorithmic trading activity is expected to accelerate. Futures volumes are already building from Asia into Europe, while desks rebalance exposure ahead of the release. Early reactions to Fed phrasing could trigger sharp intraday swings.

How could the minutes impact crypto?

The critical factor isn’t just the wording — it’s how much market expectations move.

If policymakers appear more comfortable with rate cuts or express concern about slowing growth, summer easing bets could strengthen. That scenario would likely support Bitcoin and risk assets.

But if the minutes emphasize patience and upside inflation risks, rate cuts may be pushed further out. This would likely pressure Bitcoin prices and weigh more heavily on higher-beta altcoins.

In a post on X, analyst MANI outlined two scenarios: a hawkish tone suggesting rates stay higher for longer could spark selling across crypto, while dovish signals pointing toward cuts may help prices recover.

From the previous meeting, Fed Chair Jerome Powell said there was “no rush to cut rates.” MANI warned the release could increase volatility and urged traders to manage risk carefully. The next official rate decision arrives on March 18.

Inflation data reshaped expectations

January U.S. CPI rose 2.4% year-over-year, below the 2.5% forecast. It marked the lowest reading in more than four years and suggested inflation is moving closer to the Fed’s 2% target.

Markets are now pricing roughly 2.5% of cumulative rate cuts through 2026 — the largest total since the Fed last met in December. Analyst Liz Thomas said this forward-looking view remains intact despite stronger employment data and still-elevated supercore inflation. She added that if growth stays firm, current expectations may be too dovish.

The federal funds rate remains between 3.5% and 3.75%. After multiple cuts late in 2025, the central bank paused its easing cycle. The January FOMC minutes should provide detail on that internal debate and how officials view growth and inflation risks.

What does CME FedWatch show?

Market pricing shifted sharply after the latest labor report. Ahead of January payrolls, traders assigned about a 40% probability to a 25-basis-point cut in March. But after nonfarm payrolls rose by 130,000, odds of a rate hold jumped above 92%.

According to CME FedWatch, expectations now strongly favor unchanged rates in March. That repricing has reinforced caution across crypto markets.

Fortune cited Schwartz as saying the employment data “flipped the no hiring/no firing narrative” many Fed watchers had adopted.

Short-term crypto outlook

Today’s FOMC minutes could define near-term direction for Bitcoin and altcoins. If rate-cut expectations move forward, crypto may see a relief bounce. If Fed messaging turns hawkish, renewed pressure on risk assets is likely.

In short, crypto is sitting in a data-driven transition zone. The tone of the minutes won’t just shape today’s price action — it could reset perceptions around the entire 2026 rate path.

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Recent bounce attempts are not a reversal signal for whales; instead, they’ve opened a liquidity window for distribution. Retail investors’ “buy-the-dip” optimism has become the primary exit liquidity. This clarifies the on-chain answer to “why is Bitcoin falling”: selling pressure persists, and optimism hasn’t fully unwound. $63,007 is being watched as support, while $71,672 stands as short-term resistance. Current rallies still fail to confirm a sustained trend reversal.

At the time of writing, Bitcoin is trying to hold around $69,500. On-chain data suggests this balance remains fragile. Whale pullback, rising unrealized losses, and retail investors maintaining positions continue to keep pressure alive. In other words, it’s not just price action — market psychology hasn’t fully reset.

Bear Market Intensity: What Does the Unrealized Loss Ratio Signal?

During Bitcoin’s drop toward $60,000, the Relative Unrealized Loss ratio climbed to roughly 24%. This sits well above the classic bull–bear transition zone.

Put differently, the market is technically in bear territory. Historically, levels above 50% have marked full capitulation. The current reading points more toward an active surrender phase. Selling pressure is widespread — but not exhausted.

Which suggests the search for a bottom may not be over. Volatility could remain in play.

Retail Accumulates While Large Wallets Distribute

A notable divergence is emerging in supply distribution.

Wallets holding less than 0.01 BTC are steadily increasing their share of total supply. This group typically reacts emotionally to price swings, yet is now quietly accumulating.

At the same time, wallets holding between 10 and 10,000 BTC show mild but consistent distribution. The contrast matters. Social sentiment remains broadly bearish, yet retail investors still view current levels as value zones. Optimism hasn’t been fully flushed.

Historically, deeper bear markets coincide with retail capitulation. That point hasn’t arrived. Until it does, sustained upside momentum remains difficult.

Network Activity Surprises: New Addresses Surge

New Bitcoin addresses jumped roughly 37% over the past week. At first glance, this looks positive. But in bear markets, such spikes don’t always signal adoption.

Much of this influx tends to come from small-scale participants seeking volatility plays. While new users may support price during consolidation, they don’t shift market control. Network growth continues — power dynamics do not.

Macro risk-off conditions could easily overpower even strong on-chain activity.

BTC Price Levels to Watch

Aggressive buying near $63,007 prevented a deeper breakdown below $60,000, confirming solid demand in that zone. Still, downside risk remains elevated.

Internally, $66,700 has been reclaimed, but this micro-structure break alone doesn’t signal reversal. With funding rates negative, opening additional shorts carries risk. The market is compressed, and weekend conditions could trigger a sharp short-squeeze wick.

Key levels ahead:

• $63,007 – primary support

• $71,672 – first major resistance

• Weekly close above $73,880 – critical

• If structure holds, $79,200 emerges as a medium-term technical target

If weekly price action leaves only a wick and closes higher, the following week could start on firmer footing.

For now, the market is still searching for balance.

The information and commentary in this article do not constitute investment advice.

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The post Why Is Bitcoin Falling? Has BTC Entered Bear Territory? appeared first on Coin Engineer.

Bitcoin highlighted its growing sensitivity to macroeconomic developments, reaching a local bottom just above $91,000. On February 3, at 02:00 UTC, Bitcoin dropped to $91,530, marking its lowest level in over three weeks, before recovering to $95,306 by 08:15 UTC.

BTC/USD, 1-Day Chart

Bitcoin’s decline came after U.S. President Donald Trump signed an executive order on February 1 to impose additional tariffs on imports from China, Canada, and Mexico.

Ryan Lee, Head Analyst at Bitget Research, noted that Trump’s tariffs escalated global trade war concerns, shaking investor confidence and exerting downward pressure on Bitcoin.

Lee explained that while Bitcoin has traditionally been seen as a hedge against traditional market volatility, recent price movements highlight its increasing sensitivity to global economic developments. According to him, geopolitical tensions and government policies are now playing a more decisive role in shaping the cryptocurrency market.

The analyst added that Canada, Mexico, and China’s retaliatory measures further heightened investor concerns, triggering a flight from risky assets, including cryptocurrencies.

Bitcoin’s price movement aligns with previous predictions from analysts, who forecast a deeper correction following a “local peak” above $110,000 in January.

GMI Total Liquidity Index, Bitcoin (RHS)

Bitcoin Continues to Be Sensitive to Macroeconomic Developments

Raoul Pal, Founder and CEO of Global Macro Investor, highlighted Bitcoin’s correlation with the global liquidity index, suggesting that Bitcoin could fall below $70,000 in February before a temporary peak in liquidity.

Despite being viewed as a hedge against volatility in traditional finance markets, Bitcoin remains sensitive to macroeconomic developments.

However, Alvin Kan, COO of Bitget Wallet, believes that Bitcoin has recovery potential compared to traditional markets. He stated, “While the sell-off reflects a typical risk-off reaction to macroeconomic shocks, Bitcoin’s safe-haven perception still leaves room for a rebound, particularly as digital assets are increasingly adopted as hedges against inflation and currency devaluation.”

Short-term concerns related to the $36 trillion U.S. debt ceiling persist, but industry experts remain optimistic about Bitcoin’s outlook for the rest of the year. Analysts predict Bitcoin could rise above $160,000 to $180,000 during the remainder of the 2025 market cycle.

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