Bitcoin Rises to $70,000, Extending Bounce From Thursday's Crash

Bitcoin (BTC) rose to $70,000 on February 6, extending a rebound from its recent 50% drop in value. The price move follows a sharp correction earlier in the week, with the asset now testing key resistance levels after hitting oversold conditions. The recovery coincided with a surge in U.S. planned job cuts, stoking speculation that the Federal Reserve may cut rates in response to weakening labor market conditions.

The overall crypto market capitalization increased by 1.7% in the past 24 hours, reaching $2.65 trillion. Despite this growth, momentum slowed as the market approached the $2.65–2.68 trillion resistance range, where buying pressure has been waning since the beginning of the year. Analysts are noting that the limited rebound has deepened bearish sentiment across the sector.

Bitcoin remains under $80,000, a key level where the recent breakdown occurred. This resistance has become a major psychological barrier for traders and investors. With the RSI at 25.14, the price is still in oversold territory, but momentum indicators remain bearish overall.

Why Did This Happen?

The rebound was triggered by a surge in U.S. job cuts, which raised expectations of Fed rate cuts. January saw 108,435 announced layoffs—a 205% increase from December and a 17-year high. These figures contrast with official government employment reports, which still show a strong labor market.

Investor sentiment was also lifted by positive movements in global financial markets, which indirectly benefited the crypto sector. Binance's BNB led the rebound, while Dogecoin (DOGE) saw renewed attention after a mention by Elon Musk.

Despite this, institutional investors have been net sellers of crypto funds in recent weeks. Global investment in Bitcoin funds declined by $1.321 billion last week, according to CoinShares, marking the second consecutive week of outflows.

What Are Analysts Watching Next?

Analysts are closely monitoring whether Bitcoin can break above $75,000–$80,000. This range was previously a key support zone but now acts as resistance after the recent crash. A successful breakout could signal the start of a new bullish phase. Failure to do so may result in further consolidation or a return to the $50,000–$55,000 support level according to analysis.

Meanwhile, concerns around quantum computing threats are gaining traction. While the technology is still in early stages, some experts warn that if quantum computing advances faster than expected, it could undermine Bitcoin's cryptographic security. This has led to increased research and discussions around post-quantum cryptographic solutions.

Michael Saylor of Strategy (formerly MicroStrategy) has downplayed immediate concerns, stating that quantum computing is at least a decade away from posing a real threat. However, he announced a new Bitcoin security initiative aimed at studying and preparing for potential long-term risks.

CryptoQuant has noted that long-term investors are moving into unrealized losses, a sign that the market could be entering an 'extremely bearish' phase. This trend reflects the broader struggle for liquidity and investor confidence.

What Are the Broader Market Implications?

The crypto sector is facing a prolonged period of uncertainty, with many analysts expecting further volatility. Bernstein predicts that the current decline may end when Bitcoin reaches $60,000—similar to previous cycle highs. Bloomberg Intelligence's Mike McGlone has even suggested that Bitcoin could fall to $10,000 in 2026, likening the market to the dot-com and 2008 financial crises.

Corporate Ethereum holders have also been hit hard. BitMine, the largest holder of Ethereum, saw $6.95 billion in 'paper' losses, with some investors calling its purchase the 'worst deal in history'.

Investors are also watching whether banks and financial institutions will continue to integrate Bitcoin into their services. As major firms like BlackRock explore new products, the long-term adoption of Bitcoin could play a key role in stabilizing its price.

The coming weeks will be critical for Bitcoin as it attempts to reclaim key levels and regain investor confidence. Until then, the market remains in a fragile and highly speculative phase.