Crypto market sentiment collapses as CoinMarketCap’s Fear and Greed Index crashes to 9, signaling deep anxiety despite Bitcoin and majors stabilizing.

Methodologically, the indicator pulls from five pillars: price momentum across the top 10 non‑stablecoin assets, forward‑looking volatility via BVIV and EVIV for Bitcoin and Ethereum, options put/call ratios, market composition through the stablecoin supply ratio, and CMC’s own social‑trend and engagement data. The Academy explainer stresses that “extreme fear likely indicates undervalued asset prices, while extreme greed likely indicates frothy valuations and overvalued asset prices,” echoing Warren Buffett’s maxim to “be fearful when others are greedy and greedy when others are fearful.”

In spot markets, Bitcoin (BTC) trades near $70,505 with roughly $42.8b in 24‑hour volume. Ethereum (ETH) changes hands close to $2,096, on about $20.9b in turnover. Solana (SOL) is around $87.6, after a 24‑hour range between roughly $86.2 and $88.6. That pricing backdrop lines up with a broader rebound in digital assets, with Bitcoin recently reclaiming the $71,000 area after last week’s washout and total crypto market capitalization moving back above $2.4t.

For traders, the sub‑10 print is less a trading signal than a context marker. CoinMarketCap is explicit that the Fear and Greed Index “is not a perfect indicator in itself but can provide a useful measure of the market’s sentiment,” best used alongside technicals, flows and macro drivers. In other words: quantify the fear, then decide whether you’re trading with the herd or against it.

Ethereum remains under heavy bearish pressure, with recent price action confirming a continuation of the broader downtrend. The market is currently reacting to a major sell-side expansion, and both technical structure and on-chain liquidity dynamics suggest that the asset is still navigating a critical phase where downside targets remain relevant, even if short-term relief bounces occur.

Ethereum Price Analysis: The Daily Chart

On the daily timeframe, ETH is clearly trading within a well-defined descending channel, with the price recently accelerating toward the lower boundary of this structure. The most important observation on the chart is the clean breakdown below multiple prior support levels, followed by a sharp impulsive leg to the downside. This move confirms strong bearish acceptance rather than a simple liquidity sweep.

The asset has now reached a major higher-timeframe demand zone, located around the $1.8K region, which previously acted as a base during earlier accumulation phases. The reaction off this zone has produced a modest bounce, but so far this move lacks structural strength and remains corrective in nature.

Nevertheless, the market is likely to enter a consolidation-correction phase above this crucial support until a decisive breakout occurs. The main supply zone during this consolidation range is the channel’s middle line, located at the $2.3K threshold. A break above this resistance will open the door for an extended bullish retracement toward the $2.5K significant resistance.

ETH/USDT 4-Hour Chart

Zooming into the 4-hour timeframe, the bearish structure becomes even clearer. The most recent price action shows a sharp sell-off into demand, followed by a shallow bounce that lacks impulsive follow-through.

Crucially, the rebound appears corrective and technically opens the door for a pullback toward the most recent supply zones and Fibonacci levels, located around the $2.3K to $2.6K region. These areas align with prior breakdown levels and correspond to zones where sellers previously intervened aggressively. If the price retraces into these levels without strong volume or momentum, they are likely to act as rejection zones rather than breakout points.

Until Ethereum can reclaim and hold above these supply areas, the 4-hour structure continues to favour continuation to the downside or extended consolidation within the lower range, rather than a trend reversal.

Sentiment Analysis

The ETH liquidation heatmap over the last 6 months provides critical confirmation of the bearish technical structure. A significant concentration of liquidity has been built around and just below the $2K level, which has recently acted as a strong magnet for price. The sharp sell-off into this area confirms that downside liquidity was actively targeted, resulting in a large flush of leveraged long positions.

Despite this liquidation event, the heatmap still reveals residual liquidity pockets extending slightly below current price levels, indicating that the market may not have fully exhausted its downside objectives yet. These remaining clusters continue to exert gravitational pull on price, especially if spot demand remains weak and derivatives positioning rebuilds on the long side too quickly.

That said, the intensity of liquidations around the $2K zone suggests that a meaningful portion of forced selling has already occurred. This reduces immediate liquidation pressure and explains the short-term stabilization seen after the drop. However, from an on-chain perspective, this behavior supports consolidation or corrective rebounds, not a confirmed trend reversal, unless liquidity interest decisively shifts back above current levels.

In summary, on-chain data aligns closely with the technical picture: Ethereum is still operating in a bearish liquidity-driven environment, with downside risks remaining active as long as price fails to reclaim key supply zones and attract sustained spot demand.

United States Treasury Secretary Scott Bessent wants the Senate Banking Committee to move ahead with the confirmation hearings for Federal Reserve chair nominee Kevin Warsh, even as a Department of Justice investigation into current Fed chair Jerome Powell remains unresolved.

During a Fox News interview, Bessent pushed back on Republican Senator Thom Tillis, who has threatened to delay the confirmation process until the Department of Justice investigation into the current Fed chair is concluded.

“Senator Tillis has come out and said he thinks that Kevin Warsh is an extreme candidate, So I would say, why don’t we get the hearings underway and see where Jeanine Pirro’s investigation goes?” Bessent said.

U.S. Attorney for the District of Columbia, Jeanine Pirro, opened a probe on Jan. 9 tied to Powell’s congressional testimony, which addressed cost overruns linked to a $2.5 billion renovation of the Fed’s headquarters and nearby buildings. Prosecutors are investigating whether Powell misled lawmakers about the scope and expense of the renovation project.

Powell has denied any wrongdoing and said the investigation is being used as a political pretext following his resistance to Donald Trump’s demands for faster interest rate cuts.

As previously reported by crypto.news, Senator Tillis has said he would block all Fed nominations until the Justice Department concludes its probe into Powell, even though he considers Warsh a “qualified” and “strong” candidate for the position.

“I’d be one of the first people to introduce Mr. Warsh if we’re behind this and support him, but not before this matter is settled,” Tillis said in a recent interview appearance. 

Warsh was nominated by Trump on Jan. 30 and now awaits a Senate Banking Committee review hearing, following which the panel will vote on whether to advance his nomination to the full Senate. If the full Senate confirms the nominee, he will be officially appointed as the next Federal Reserve chair.

Warsh’s nomination as the next Fed chair has had an immediate impact on the price of Bitcoin (BTC) and the broader crypto market, as he is viewed as a hawkish policymaker by the vast majority of analysts. Right after his nomination, the price of Bitcoin fell below $82,000 after weeks of trading above that level, while the total crypto market capitalization dropped to $2.8 trillion.

The trading sessions that followed saw more than $2.5 billion in liquidations of leveraged long positions, which subsequently pushed the flagship crypto below several key support levels and intensified downside volatility.

As of press time, Bitcoin has dropped over 20% since Warsh’s nomination.

Bitcoin (BTC) begins its second week of February, licking its wounds as traders remain bearish on BTC.

• Market forecasts agree that Bitcoin price action has not yet put in a reliable long-term bottom.

• CPI week comes as markets lose faith in Fed rate cuts in March.

• US dollar strength begins to fade as analysts eye a potential rerun of 2021 for Bitcoin-dollar correlation.

• Japan’s election turns heads, with analysis seeing a weaker yen and crypto headwinds to come.

• Bitcoin miners send large amounts to exchanges as the dust settles on the snap downside.

BTC price expected to attempt $60,000 retest

Bitcoin continues to trade above $70,000 as the week gets underway, but traders are anything but bullish on the short-term BTC price outlook.

Data from TradingView shows a lack of volatility around the weekly close, with BTC/USD staying around 20% higher versus its 15-month lows from last week.

In an X thread covering lower time frames, trader CrypNuevo warned that the current relief may end up as a manipulative move to liquidate late short positions.

“The intention to push price up first would be to hit the short liquidations that exist between $72k-$77k mainly. But this move is just a guess,” he wrote. 

“What we’re really anticipating here is the long wick getting filled at least 50% of it in the next weekly candles.”

CrypNuevo implied that the lows could see at least a partial retest in the short term.

“It could be an immediate wick-fill. But in the case of having a move up first, then it could probably take around 5-8 weekly candles to get filled,” he forecast. 

At the weekend, Cointelegraph reported on a broad consensus that price would make new macro lows in the future — and that these could take BTC/USD to $50,000 or lower.

Guys this isn’t the bottom. It’s just a bounce.

Historically $BTC drops 80% during its bear market.

That puts us near 40k

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— Roman (@Roman_Trading) February 6, 2026

Trader Daan Crypto Trades meanwhile considered less exciting BTC price action to come next.

“After such a volatile few weeks, price will attempt to start ranging at some point. With this recent spike in volatility and big retrace yesterday, there’s a good chance we are hitting that point about now,” he told X followers Sunday. 

“Would expect volatility to slowly come off a bit again, a range to be formed and from there on out we can reassess and look for opportunities.”

CPI due as Fed policy nerves emerge

The macro focus is back on US inflation data this week as wild gyrations in precious metals settle.

The January print of the Consumer Price Index (CPI), due Friday, forms the highlight and will follow various US employment data releases.

“Earnings season is also in full swing and macroeconomic uncertainty is elevated,” trading resource The Kobeissi Letter added on the week’s outlook.

Since announcing the new Chair of the Federal Reserve, President Donald Trump has failed to calm market nerves about future financial policy. His pick, Kevin Warsh, is thought to be notionally opposed to easing financial conditions — something that has already weighed on risk-asset performance.

Markets thus have little faith in interest rates going lower at the Fed’s next meeting in mid-March — even if Warsh is only due to take over in May.

Data from CME Group’s FedWatch Tool currently gives 82% odds of rates staying at current levels.

Commenting, analytics resource Mosaic Asset Company pointed to “stubborn” US inflation statistics as a reason for a more hawkish Fed — and associated market nerves.

“The combination of stronger economic growth and stubbornly high core inflation might starting casting a doubt on the interest rate outlook across the yield curve,” it wrote in the latest edition of its regular newsletter, “The Market Mosaic.”

Mosaic said that difficult conditions for the Fed were a “major catalyst behind the selloff in growth and AI stocks this year.”

“Rising rates makes the present value of future corporate profits worth less in today’s terms, while higher rates presents competition for investor capital as well,” it added.

As the week began, meanwhile, gold returned to the $5,000 mark, while US stocks futures joined Bitcoin in a relief bounce off Friday’s lows. 

US dollar at a ten-year crossroads

For both Bitcoin and the broader risk-asset market, US dollar strength is becoming an increasingly important potential volatility catalyst.

The US dollar index (DXY), which enjoyed a relief rally following a trip to multiyear lows near 95.5 in late January, is failing to reclaim levels above 98.

A strong dollar tends to result in pressure for Bitcoin, and while the correlation has undergone many changes in recent years, the long-term trend may provide bulls with a more reliable tailwind.

“Still holding that support. But really critical level for the long-term trend,” analyst Aksel Kibar wrote in recent dollar commentary. 

“$DXY can offer a great trade setup soon. Long or short. irrespective of direction.”

Kibar eyed DXY possibly now breaking out of a ten-year trading channel to the downside, but said that more data would be necessary before this was confirmed.

An alternative perspective comes from Henrik Zeberg, chief macro economist at crypto market insight company Swissblock.

In an X post last week, Zeberg likened the current relationship between BTC and DXY to early 2021 — around ten months before BTC/USD saw the blow-off top in its last bull market.

Far from breaking down, DXY could in fact be at the start of its next bull run.

“Strong DXY is BEARISH for BTC – just not in the initial phase of the Bull. Likely because ROTATION into US Assets,” he wrote. 

“In 2021 – we had 12 weeks of BTC rally into the new DXY Bull. The rally gained 130% into the TOP for BTC. I see same development again! +100% gain in BTC – into its FINAL TOP.”

An accompanying chart suggested a target for that “final top” at $146,000.

Yen weakness stays on the radar

For the short term, however, Bitcoin faces another macro hurdle: a new fiscal policy era in Japan.

After the reelection of Prime Minister Sanae Takaichi, Japanese stocks surged to record highs — and analysis now sees negative impacts for US investment vehicles and crypto.

“The landslide victory of Sanae Takaichi marks Japan’s shift toward aggressive fiscal stimulus and tolerance for currency depreciation,” analyst XWIN Research Japan wrote in a blog post published on onchain analytics platform CryptoQuant. 

“The ‘Takaichi Trade’ has lifted the Nikkei to record highs while reshaping global capital flows.”

XWIN referenced findings warning of “slowing inflows” into US equity exchange-traded funds (ETFs), thanks to a weaker yen increasing the attractiveness of Japanese bonds.

“Against this backdrop, Bitcoin faces short-term downside risk,” it continued. 

“In risk-off phases, BTC tends to correlate with U.S. equities, allowing equity-led de-risking to spill into crypto markets. This pressure does not reflect deterioration in Bitcoin’s on-chain fundamentals, but cross-asset risk management.”

As Cointelegraph reported, crypto markets remain highly sensitive to Japan-related news, with one theory even attributing the yen carry trade to last week’s BTC price crash.

Analyzing the yen situation ahead of the election, Robin Brooks, a senior research fellow at Brookings, described its weakness as a “political liability.”

“With the election out of the way, especially if Takaichi does well, the optics of Yen depreciation won’t matter nearly as much,” he predicted. 

“So the election is conceivably a catalyst for the next round of Yen weakening.”

Bitcoin miners see “exceptional” exchange inflows

Bitcoin miners are busy adjusting to current reality after Bitcoin’s 15-month lows — but research warns that a sell-off risk remains.

Related: Bitcoin difficulty plunges, Buterin sells off Ethereum: Hodler’s Digest, Feb. 1 – 7

Miner inflows to exchanges reached their highest levels since 2024 in recent days, with Feb. 5 alone seeing total deposits of 24,000 BTC.

Describing that tally as “exceptional,” CryptoQuant contributor Arab Chain said that the market is undergoing a “redistribution phase.”

“Notably, this rise in miner activity comes within a market environment characterized by clear volatility and reduced risk appetite among segments of traders, which could add an extra layer of short-term selling pressure,” a blog post explained.

“However, these inflows do not necessarily indicate the start of a prolonged downtrend, but rather may represent a natural redistribution phase within the market cycle.”

The classic Hash Ribbons indicator, which measures periods of miner stress, likewise continues its reaction to Bitcoin’s flash crash.

The indicator’s two moving averages of hash rate show no sign of forming a classic bullish cross, firmly invalidating its latest “buy” signal from early January.