VanEck Analyst: Bitcoin Plunge Lacks Single Catalyst, Market Bottom Prediction More Challenging

Bitcoin (BTC) traded above $65,000 on February 6 as the recent macro-driven sell-off subsided, showing early signs of recovery. Ethereum (ETH) hovered near $1,900, while Ripple (XRP) surged more than 10% to $1.35. Despite these rebounds, total crypto liquidations reached $2.6 billion in the past 24 hours, with long positions accounting for the bulk of the losses.

The derivatives market reflected ongoing bearish sentiment, with Bitcoin futures open interest (OI) declining to $47 billion—the lowest since mid-March 2025. A shrinking OI suggests that investors are reducing their leveraged positions and avoiding new risk exposure. This trend could limit the buying pressure needed to sustain an uptrend.

XRP also faced a similar decline in futures OI, dropping to $2.4 billion on February 6 from $2.57 billion the previous day. This drop marks the first time in a year that OI has fallen below this level. Lower OI indicates a lack of confidence in XRP's ability to maintain an uptrend.

Why Did This Happen?

Bitcoin's recent price decline lacked a singular trigger, according to Matthew Sigel, head of digital asset research at VanEck. Unlike previous sell-offs driven by events such as the FTX collapse or China's mining ban, this downturn was caused by a confluence of factors, including leverage unwinding and macroeconomic pressures.

One major factor was the rapid reduction of leveraged positions in Bitcoin futures. Open interest has fallen more than 20% in a week, reaching $49 billion from $61 billion the previous week. This decline indicates that investors are actively closing positions and reducing risk exposure.

Additionally, AI-related hype has waned, affecting Bitcoin miners who had pivoted to high-performance computing projects. As confidence in AI's monetization potential faded, miners were forced to sell Bitcoin to fund these ventures, increasing market supply.

How Did Markets React?

Ethereum ETFs have seen outflows totaling $81 million over two consecutive days, with cumulative inflows declining to $11.83 billion. This trend reflects a shift in institutional investment strategies, as ETF managers reduce exposure to crypto assets amid volatility.

XRP ETFs recorded smaller inflows of $1.28 million, down from $4.8 million the prior day, further illustrating reduced confidence in altcoins.

Bitcoin's recent volatility has also impacted leveraged positions on decentralized finance (DeFi) platforms. For instance, a wallet attributed to President Donald Trump's World Liberty Financial sold 173 wrapped Bitcoin (WBTC) to repay $11.75 million in stablecoin debt. This voluntary deleveraging prevented forced liquidation and allowed the wallet to maintain a health factor of 1.54, safely above the Aave protocol's 1.0 threshold.

What Are Analysts Watching Next?

The path forward for Bitcoin and the broader crypto market depends on a few key factors. Glassnode analysts have identified a $1.25 billion short gamma pocket near $80,000, suggesting further downside risk if the price breaks through this level. A clean move below $80,000 could trigger dealer hedging and intensify sell-side pressure.

Analysts also remain focused on macroeconomic indicators, particularly U.S. inflation and the potential nomination of Kevin Warsh as Fed Chair. Strategy CEO Phong Le stated that Bitcoin would need to fall to $8,000 and remain there for five years to pose a risk to the company's balance sheet. While this scenario is extreme, it highlights the long-term resilience expected from major crypto holders.

Retail and institutional investors are also monitoring ETF flows. ETF outflows have reduced a key source of demand, with spot Bitcoin ETFs seeing net outflows of $1.61 billion in January 2026. Without this demand, Bitcoin faces greater structural sell pressure.

Miner activity remains another watchpoint. Data from Glassnode shows that miners have consistently sent coins to exchanges, contributing to net outflows and structural sell pressure. This trend adds to the broader downward momentum in the market.

Bitcoin is currently trading at a critical juncture. While it has rebounded from recent lows near $60,000, the market remains cautious. Analysts like VanEck's Matthew Sigel believe that the current price reset presents an opportunity for long-term investors, but structural pressures suggest further volatility is likely.

The interplay between macroeconomic conditions, leveraged positions, and institutional demand will ultimately determine whether this correction leads to a sustainable bottom or continues downward.