On February 1, 2026, the price of Bitcoin briefly broke through the $81,000 support, dipping to around $80,500. During the main trading hours in the UTC+8 time zone, it recorded a daily decline of 3.87% (Bitget data), while on a 24-hour basis, it fell about 1.8% (HTX data), marking a new low in nearly 10 months. Recently, the price has been fluctuating around the $80,000 to $82,000 range, which is both a densely traded area in terms of technical patterns and a "safety belt" repeatedly emphasized by bullish sentiment. When the price first substantially touched $80,500, the debate over whether the "key $80,000 level can hold" instantly dominated market narratives, intertwining a defense battle around this critical point with the rising panic sentiment, forming the main conflict of today's market: is this a healthy correction, or a prelude to a larger trend reversal?
Critical Point in Crisis: The Long-Short Threshold Near $80,500
● On the downward path, the support at the $81,000 level, which had been validated multiple times on the previous trading day, was lost, and the price quickly tested $80,500 during intraday trading. The 3.87% daily decline is not extreme, but it is enough to break the sideways pattern. The 1.8% retracement over 24 hours, combined with the psychological implication of "hitting a new low in nearly ten months," means this dip is not just an ordinary price fluctuation but is interpreted by the market as a concentrated test of the effectiveness of the support zone, triggering technical traders, leveraged bulls, and algorithmic strategies simultaneously during this downturn.
● The $80,000 to $82,000 range had previously accommodated a large amount of turnover: on one hand, this area is the core dense trading zone of the previous consolidation platform, technically viewed as the "lifeline" of the mid-term trend; on the other hand, bulls have continuously packaged this range in narrative terms as the "institutional cost zone" and "safety buffer," repeatedly emphasizing its support significance in social media and research reports. Therefore, once the price effectively breaks below this lower boundary during trading, it is often seen as a trend signal switching from high-level consolidation to deeper adjustment, triggering a chain reaction of passive liquidation and risk control models.
● Adding to the pressure, on-chain and derivatives data provide a clear threshold for a potential cascade—according to Coinglass data, if Bitcoin effectively breaks below $80,000, it could trigger liquidation risks for long positions amounting to approximately $402 million. This means that below $80,000 is not only a psychological integer level but also a concentrated release area for the "break—cascade—liquidation" chain risk: a small amount of new selling pressure could amplify into forced liquidations for bulls, further increasing the decline, creating a typical liquidity vacuum and a strong liquidation waterfall. This is why the market's obsession with defending the $80,000 level is particularly strong.
Large Institutional Transfers: The Shadow of 2,000 Bitcoins
● In the context of the same day's market, Abraxas Capital transferred 2,038 BTC to the exchange Kraken, a notable on-chain action. Roughly estimated at current prices, this transfer corresponds to a scale of several hundred million dollars, and in an environment where liquidity is already weak, any large fund movement by a single institution is easily interpreted as significant. Timing-wise, this transfer coincided almost perfectly with Bitcoin breaking the $81,000 support, intensifying investor concerns about "whether institutions are cashing out at high levels," giving it a presence beyond the sheer size of the funds in that day's market.
● From an inertia perspective, "large BTC transfers to exchanges" are often automatically translated by the market as "potential selling pressure." During a phase of rising panic sentiment, many short-term traders do not investigate the true purpose of the funds but directly view it as a signal of "preparing to sell," leading them to reduce positions early or follow the trend to sell. This expectation, under incomplete information, amplifies the imbalance on the sell side of the order book, causing supply that could have been gradually absorbed by the market to be interpreted as a "threat of a crash," triggering further short-term selling and price declines.
● However, it is essential to distinguish that there is a fundamental difference between "fund movement" and "actual selling." On-chain data can only confirm that Abraxas Capital sent 2,038 BTC to the Kraken address, but it cannot directly prove that these tokens have already been or will soon be sold off entirely; they may be used for hedging, staking, over-the-counter settlements, or merely for rebalancing and account management. Nevertheless, in the current narrative environment, such actions are often cited as "evidence" of panic stories, amplifying the market's imagination of institutional liquidation, but they are not definitive proof of continued price declines.
Rising Panic: Social Media Sentiment Hits New Lows
● Data from public opinion platforms synchronously provided warning signals. Several news platforms cited monitoring results indicating that the proportion of "panic" related discussions about Bitcoin on social media has surged to a high level since 2026, with negative vocabulary and bearish viewpoints significantly increasing on mainstream social platforms. Meanwhile, on-chain and sentiment analysis firm Santiment's sentiment indicators have fallen to their lowest point since November 2025, indicating that the overall risk appetite in the market has dropped back into a conservative or even panic zone since the fourth quarter of last year.
● From the resonance of price, social media discussions, and sentiment indicators, this round of correction has formed a typical "price decline—negative narrative spread—weakening sentiment indicators" closed loop. After the price broke through key support, tags like "crash," "institutional dumping," and "end of the bull market" quickly spread on social media, further increasing the proportion of panic discussions; the rise in panic volume, in turn, stimulated more holders to worry about further declines, choosing to reduce positions early, creating additional selling pressure, and causing sentiment indicators like Santiment to continue weakening, completing a self-fulfilling negative narrative cycle.
● Several analysts have warned in media interviews that if macro market volatility continues, or if Bitcoin cannot regain key price levels (especially above the $80,000-$82,000 range) in the short term, the current panic sentiment is likely to persist for several days. In this environment, even if prices temporarily stabilize later, investors' doubts about "whether the rebound is sustainable" remain strong, and negative sentiment has a certain self-reinforcing property, requiring more robust price performance and trading volume to gradually repair the "psychological gap" left by this emotional shock.
Liquidity Becomes Fragile: External Pressures from Geopolitical Risks
● The reason this round of adjustment can amplify into a new low in nearly ten months with relatively limited selling volume is closely related to the current overall market liquidity being weak. Order book data shows that buying depth has significantly declined compared to previous months, with insufficient willingness to absorb at high levels, causing the same scale of sell orders to create a larger price impact. When active sell orders emerge concentrated in a short time frame, the weak buy wall struggles to provide effective buffering, making the phenomenon of "small-scale selling triggering large declines" more frequent, amplifying the intensity of short-term volatility.
● The external macro environment is also quietly tightening risk appetite. On one hand, the ongoing tensions in the Middle East are putting overall valuation pressure on global risk assets; on the other hand, the uncertainty surrounding the potential government shutdown in the United States is still fermenting, with market expectations for fiscal and policy directions swinging unpredictably. Although the specific policy timeline remains unclear, this macro-level uncertainty alone is enough to suppress the willingness of funds to allocate to high-volatility assets, causing the crypto market, which originally relied on emotion and liquidity-driven dynamics, to lose some incremental buying support, making it particularly passive during the correction phase.
● In terms of individual coin performance, this pressure manifests as a "broad decline + few safe havens" structural market. Among the top 100 cryptocurrencies by market capitalization, only a few projects recorded gains, with Canton rising about 13.17% and Monero rising about 4.05%, standing in stark contrast to the general decline of mainstream coins. This "counter-trend gain" more reflects a local risk-averse migration of funds under systemic pressure—not a recovery of overall risk appetite, but a redistribution of existing funds among highly correlated assets, confirming the current market's fragility and differentiation in liquidity.
Focus of Long-Short Game: The $80,000 Lifeline
● After the derivatives data presented the "potential $402 million long liquidation below $80,000" figure, the psychological battle between bulls and bears around this level was further amplified. For bears, falling below $80,000 not only signifies a further weakening of technical patterns but also means they can push the price below the integer level, leveraging the additional downward momentum brought by passive liquidations; for bulls, defending this price level is not only a practical need to avoid liquidation cascades but also a symbolic battle to uphold the integrity of the bull market narrative, making the $80,000 line the most symbolically significant "lifeline" at present.
● Different types of participants exhibit clear strategic differentiation at this position. Short-term traders are more focused on whether a liquidation waterfall will occur, leaning towards light positions for quick in-and-out trades, aiming to profit from the volatility brought by the battle for this level; high-leverage bulls are forced to choose between margin pressure and confidence in the future market, with some opting to reduce positions early to avoid passive liquidations, while others go all in, attempting to "hold the line for a rebound"; in contrast, medium to long-term holders are more inclined to assess whether this round of correction alters the long-term structural trend, with most focusing on the depth and duration of the correction rather than the outcome at a single level.
● From a path perspective, the market is facing two distinctly different evolutions: first, if the $80,000 level can be defended, and in the short term, bears fail to trigger large-scale liquidations, bulls complete a "scare but no harm" defense, and prices may oscillate between $80,000 and $82,000 in the coming days, making this dip remembered as a "deep spike"; second, if bulls abandon defense or passively lose the $80,000 level, triggering the aforementioned liquidation chain, the short-term volatility range will be rapidly shifted downward, leaving a mark of "defeat at a key integer level" in market memory, causing every subsequent rebound touching the $80,000 line to evoke the emotional shadow of this failure, forming a new "upper pressure zone."
From a Long Shadow to the Next Step: The Choice After Panic
From the comprehensive characteristics of the market, this round of Bitcoin's decline from above $81,000 to around $80,500, creating a new low in nearly ten months, is not driven by a single factor, but rather the result of weak liquidity, macro uncertainty, large fund movements, and amplified emotions: weak buying depth has magnified short-term selling pressure, external geopolitical and policy risks have suppressed risk appetite, large on-chain transfers by institutions have been infinitely amplified in narrative, while the simultaneous weakening of social media and sentiment indicators has provided an amplifier for this "long shadow."
Moving forward, the market's focus will be highly concentrated on several key signals: first, whether the $80,000 integer level can be defended in the short term or quickly reclaimed; second, whether the panic readings from social media and sentiment indicators like Santiment show signs of cooling in the coming days, and whether negative narratives can be diluted by more neutral discussions; third, if prices dip again, whether the potential liquidation pressure in the derivatives market will be concentrated and released, creating a "clearing-style" volatility that sets the stage for subsequent stabilization. These variables will collectively determine whether this correction is a "deep reshuffle within a bull market" or the starting point for a larger trend reversal.
For individual participants, during periods of extreme emotions, the hardest part is often not judging the direction, but managing one's positions and rhythm. In the most intense moments of the battle for key levels, excessive chasing of price movements often only amplifies drawdowns. The rational approach is to clearly distinguish one's time frame and risk tolerance: short-term traders should strictly set stop-losses and position limits to avoid being led by emotions; medium to long-term participants should wait for price, volume, and sentiment data to resonate again before adjusting their trend judgments, rather than being swayed by a single candlestick. Panic itself does not disappear out of thin air, but for disciplined participants, it can simply be noise that needs to be traversed, rather than the main character that destroys their accounts.
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