Bitcoin Price Crashes Below $77,000 as Bear Market Debate Intensifies

Bitcoin has fallen nearly 40% from its October 2025 all-time high above $126,000, breaching $78,000 for the first time since April 2025. The Kevin Warsh Fed nomination, the unravelling AI trade, and mass put-option buying have split analysts between bear market calls and “buy the dip” conviction. Here is where Bitcoin stands and where it could go next.

By UK Political Finance Desk  |  Published: 2 February 2026  |  Reading time: 9 min

Bitcoin entered February 2026 in its deepest drawdown since the 2022 bear market. After touching an all-time high above $126,000 in October 2025 — a peak fuelled by the institutional adoption wave following the approval of spot Bitcoin ETFs and optimism around US regulatory reform — the world’s largest cryptocurrency has shed approximately 40% of its value. On 31 January, BTC broke below $78,000 for the first time since April 2025, bottoming out at just over $77,000 before staging a tentative recovery toward $79,000 on 1 February.

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The selloff has intensified the debate about whether Bitcoin has entered a full bear market or whether this represents a severe but ultimately healthy correction within a longer-term bull cycle. The answer matters enormously — not just for crypto traders, but for the growing number of institutional investors, pension funds, and retail savers who have allocated to Bitcoin over the past two years.

Bitcoin — Key Price Data (2025–2026)

Date / Period	Price (USD)	Event
October 2025 (peak)	~$126,000	All-time high
December 2025 (low)	~$80,000	Year-end selloff; risk asset rotation
January 2026 (mid)	~$88,000	Partial recovery; rangebound
30 January 2026	~$78,000	Warsh nomination triggers selloff
31 January 2026	~$77,000	9-month low; broke below $78K
1 February 2026	~$77,000–$79,000	Tentative stabilisation
2 February 2026	~$75,000–$78,000	Continued weakness; market cap ~$1.54T

What Is Driving the Selloff?

The decline has been driven by a convergence of macroeconomic, regulatory, and sentiment factors. The most immediate catalyst was the same event that crashed gold: Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair. Warsh is expected to pursue tighter monetary policy than his predecessor Jerome Powell, which would reduce the likelihood of the aggressive interest-rate-cutting cycle that crypto bulls had priced in for 2026. A stronger dollar and higher real yields are headwinds for Bitcoin, which tends to perform best in environments of easy money and dollar weakness.

Broader risk-asset weakness has compounded the pressure. Questions about the durability of the artificial intelligence investment boom — which had underpinned the tech-heavy Nasdaq through much of 2025 — have led to a reassessment of high-beta assets across the board. Crypto, as the most volatile corner of the risk spectrum, has suffered disproportionately. Forced liquidations in the derivatives market have amplified the selling, with leveraged long positions being unwound as prices fell through key support levels.

Factors Behind the Bitcoin Selloff

Factor	Detail	Impact on BTC
Warsh Fed nomination	Hawkish Chair signals tighter monetary policy	Reduces rate-cut expectations; bearish
AI trade unwinding	Tech/growth stock revaluation	Risk-off rotation hits crypto hardest
Leveraged long liquidations	$2B+ in liquidations in a week	Cascading sell pressure
Dollar strength	DXY rises on hawkish Fed expectations	Inversely correlated with BTC
Geopolitical uncertainty	Tariffs, trade wars, Iran tensions	Mixed — some safe-haven bid, but risk-off dominates
Regulatory uncertainty	Clarity Act still pending in Congress	Institutional hesitancy persists

The Bear Market Debate

Analysts are sharply divided. Carmelo Alemán of Crypt Analytics has declared that Bitcoin has entered a bear market, citing a sequence of breakdowns across major support levels. His analysis points to signs of capitulation — a final wave of panic selling that typically marks the end of a selloff but can precede further declines before a genuine bottom forms.

On the other side, veteran analysts have urged caution about premature bear market declarations. The analyst PlanC noted that corrections of 35-40% are not historically unusual within Bitcoin bull runs. A 40% drawdown from the $126,000 peak would imply a floor around $75,000-$80,000 — almost exactly where Bitcoin currently trades. If history is a guide, such a level could represent the deepest pullback before a resumption of the uptrend.

Bitcoin — Historical Corrections Within Bull Markets

Period	Peak	Trough	Correction	Outcome
Jan 2021	$42,000	$29,000	-31%	Rallied to $64,000 by Apr 2021
May 2021	$64,000	$30,000	-53%	Rallied to $69,000 by Nov 2021
Mar 2024	$73,000	$49,000	-33%	Rallied to $126,000 by Oct 2025
Oct 2025 – Feb 2026	$126,000	~$77,000	-39%	TBD

Options Market: $75K Puts as Popular as $100K Calls

The derivatives market tells a revealing story. On Deribit, the world’s largest crypto options exchange, the $75,000 put option — a bet that Bitcoin will fall below that level — now has $1.159 billion in notional open interest. This is almost identical to the $1.168 billion in open interest on the $100,000 call option, which had been the dominant trade for weeks. The convergence of these two positions encapsulates the market’s uncertainty: traders are placing equally large bets on a further crash and on a recovery to six figures.

Deribit Options — Key BTC Positions (1 February 2026)

Strike Price	Type	Notional OI (USD)	Sentiment
$75,000	Put (bearish)	$1.159 billion	Bet on further decline
$100,000	Call (bullish)	$1.168 billion	Bet on recovery to six figures

Expert Price Predictions for 2026

Industry executives and investors surveyed by CNBC forecast a wide range of outcomes for Bitcoin in 2026, reflecting the extreme uncertainty that has gripped the market. Predictions range from a low of $75,000 to a high of $225,000 — a spread that underscores how difficult it is to forecast an asset that remains driven as much by narrative and sentiment as by traditional fundamentals.

Bitcoin Price Predictions for 2026

Analyst / Institution	Low Estimate	Central Estimate	High Estimate
Carol Alexander (Univ. of Sussex)	$75,000	$110,000	$150,000
James Butterfill (CoinShares)	—	$120,000–$170,000	—
Alex Thorn (Galaxy)	“Tough to predict” — complex environment
CoinCodex (algorithmic)	$74,425	—	$105,000
CNBC consensus range	$75,000	—	$225,000

What UK Investors Need to Watch

For British crypto investors, the landscape in February 2026 is defined by several key variables. The FOMC meeting later this month will provide the first official signal of how the Warsh-led Fed (assuming confirmation) intends to approach monetary policy. The progress of the Clarity Act through Congress — a bill that would create a comprehensive regulatory framework for digital assets — could remove a persistent overhang. And the broader trajectory of risk appetite, as influenced by the AI valuation debate and global trade tensions, will determine whether Bitcoin’s correlation to tech stocks remains the dominant force.

The FCA’s stance on crypto marketing in the UK, which tightened in 2024, means that UK retail investors are operating in a more regulated environment than their US counterparts. The current correction may test the resolve of those who entered the market during the 2025 rally. For long-term holders, the historical pattern — in which 30-40% corrections within bull cycles have consistently been followed by new highs — offers some comfort. For those with shorter time horizons, the next few weeks will be turbulent.

Bitcoin — Technical Snapshot (2 February 2026)

Indicator	Value	Signal
Current Price	~$77,000	—
RSI (14-day)	24.99	Oversold
Market Cap	~$1.54 trillion	—
24h Volume	~$23.9 billion	Elevated
Circulating Supply	19.98M / 21M max	95.1% mined
All-Time High	~$126,000 (Oct 2025)	-39% from ATH
Key Support	$75,000	Critical level
Key Resistance	$85,000–$88,000	Recovery target