Bitcoin Rebounds, But Risk Asset Outflows Aren't Over
Bitcoin began to rebound on Friday (February 6th) after briefly falling to a 16-month low in the previous session. However, this recovery hasn't changed the overall picture: the crypto market remains mired in global risk-off sentiment, as investors choose to reduce speculative assets amid uncertainty over the direction of US monetary policy and pressure from the tech stock market.
In the European session, Bitcoin traded around $64,894, after hitting a daily high of $71,734 and a low of $60,297. This extremely wide range of movement confirms one thing: BTC's volatility is again "crazy"—the price can fluctuate thousands of dollars in a matter of hours.
While the intraday rebound appears strong, Bitcoin remains headed for a deep weekly decline and is on track for a third consecutive week of decline. In this type of environment, rebounds often occur due to short-covering and "buying the dip," but are still vulnerable to failure if global sentiment fails to improve.
Additional pressure came from the corporate side: Strategy Inc. (the largest corporate BTC holder) reported a large quarterly loss, primarily due to the decline in the value of its Bitcoin holdings. This news fueled negative sentiment, as the market read: if major players were also "under pressure," volatility could escalate.
From a macro perspective, investors were also weighing the political and policy implications: the nomination of Kevin Warsh as the next Fed chair was seen by the market as potentially bringing a tighter (hawkish) policy tone, which is typically unfriendly to speculative assets like crypto. Furthermore, pressure on US technology stocks fueled the sell-off in risk assets—and crypto often gets dragged along due to the correlation in sentiment.
Altcoins followed BTC's recovery, but the damage was deeper. Ethereum (ETH) was hovering around $1,875 in the European session, with a daily range of $1,757–$2,139—indicating that altcoin volatility remains high and prone to whipsaws.
Source: Newsmaker.id
