Bitcoin price plunged to $60,000, its biggest single-day fall since the FTX crash.
Prices rose to above $66,000 as analysts forecast a potential dead cat bounce.
Market sentiment remains in extreme fear.
Bitcoin fell sharply on Friday, crashing to lows of $60,000, which ignited widespread selling before swiftly staging a dramatic recovery to around $67,100.
The volatile swing has sent the cryptocurrency market sentiment into extreme fear, with top altcoins, including Ethereum, XRP, and Solana, hitting critical support levels below $1,900, $1.40, and $80, respectively.
But after experiencing one of its most severe single-day plunges in history, can bulls sustain the flip?
Bitcoin sees biggest 24-hour dip since FTX crash
As noted, Bitcoin plummeted more than $10,000 in a matter of hours on Thursday, briefly dipping to lows near $60,000.
While Bitcoin has since recovered some ground and stabilised near $67,000 at the time of writing, the broader market remains under pressure following the cryptocurrency’s sharpest one-day decline since the collapse of FTX in November 2022.
Unlike previous sell-offs triggered by clear catalysts such as regulatory actions or exchange failures, the latest downturn appears to have been driven largely by technical factors.
Analysts have pointed to a wave of liquidations and forced unwinding of highly leveraged positions, as traders who had positioned for continued gains were caught off guard by the sudden reversal in momentum.
Crypto analyst and investor Lark Davis shared the following on X:
There’s discussion that Bitcoin’s dump is part of a bigger domino effect.
People borrowed money to buy Bitcoin, gold, and silver. When prices dropped, lenders said “give us more money NOW or we’ll sell your stuff.”
The problem: People didn’t have cash, so they sold their OTHER…
— Lark Davis (@LarkDavis) February 6, 2026
Data from Coinglass showed that more than $2.6 billion worth of cryptocurrency positions were liquidated over the past 24 hours, with Bitcoin derivatives accounting for the largest share.
The sell-off spread across major altcoins. Ethereum fell below $1,800 for the first time in more than a year, while Solana slid to around $67, its lowest level since December 2023.
XRP also came under heavy pressure, touching lows near $1.13 and raising the risk of a move back below the $1 mark for the token linked to Ripple.
Market participants noted that open interest in Bitcoin futures had climbed to record levels before the downturn, leaving heavily leveraged long positions exposed when prices reversed sharply.
Bitcoin price outlook: dead cat bounce or sustained rally?
As Bitcoin trades near $66,000, traders are weighing whether the rebound marks the start of a sustained recovery or represents a short-lived “dead cat bounce” that could give way to renewed losses.
Bearish sentiment remains dominant, with market confidence sliding to extreme lows.
The CoinMarketCap Fear and Greed Index is currently at 5 out of 100, signalling severe investor anxiety.
Despite this, some analysts argue that supportive factors are still present.
The scale of the recent sell-off, driven in part by heavy long liquidations, has raised the possibility of a short squeeze.
If short sellers continue to cover positions, prices could extend their recovery.
For bulls, a sustained move above $70,000 and a retest of $73,000 would be key technical milestones.
However, if momentum weakens amid ongoing macroeconomic and geopolitical pressures, Bitcoin could slip toward $60,000, undermining the rebound.
In that scenario, some market participants see $50,000 as the next potential downside target.
