Why Bitcoin Price Is Dropping Right Now

Bitcoin doesn’t usually crash because of one dramatic headline.

Most of the time, it drops because several pressure points line up at once: macro risk-off, leverage unwind, weak spot demand, and bad technical structure.

That’s what I’m seeing right now.

TL;DR

If you want the one-screen version:

Risk assets are shaky (especially tech), and BTC is trading like a high-beta risk asset.
Leverage got flushed — liquidations amplify every downside move.
Spot demand is not strong enough to absorb forced sellers.
Market structure is fragile (thin liquidity + overhead supply).
Sentiment is broken — bounces get sold fast.

No single villain. It’s a stack.

1) Macro risk-off is dragging BTC with it

When Nasdaq rolls over, BTC has recently been following it lower almost tick-for-tick.

That’s not the “digital gold” narrative people want, but it’s the tape we have right now.

What changed:

stronger-than-expected macro data reduced near-term rate-cut expectations
equities lost momentum
crypto correlation to downside equity moves increased

In this regime, traders de-risk first and ask philosophical questions later.

2) Liquidation cascades are doing what they always do

In thin order books, even medium sell pressure can trigger liquidation chains.

That creates the classic crypto feedback loop:

price drops
leveraged longs get liquidated
market sells more into weakness
price drops more

This is why drops feel vertical. It’s not just “investors changed their mind.” It’s positioning getting force-closed.

3) Demand is weak where it matters: real spot bids

Perp activity and narratives can pump markets for a while, but eventually you need real buyers.

Right now, conviction looks soft:

open interest has come down hard from peak levels
crypto-related equities are getting sold
rebounds fail to hold

That combination usually means we’re still in a distribution / de-risk phase, not a clean re-accumulation phase.

4) Technical structure is damaged

Once key levels break, every bounce becomes a “sell the rally” opportunity.

That creates heavy overhead supply:

late buyers are trapped above
they sell into relief moves to reduce pain
upside follow-through dies quickly

So even when BTC pops 8–15%, it can still be a dead-cat rally unless spot demand confirms the move.

5) Sentiment has gone from bullish to exhausted

The psychological shift is obvious:

euphoria is gone
confidence in quick V-shaped recovery is fading
participants are rotating to whatever is currently working

When sentiment flips like this, time becomes part of the correction. Price can stay weak longer than most people expect.

What I’m watching next (practical checklist)

Instead of arguing on X, I track these:

BTC vs Nasdaq on red days
If correlation breaks lower, that’s good. If it stays tight, macro still controls.
Open interest + liquidation intensity
I want to see leverage reset without fresh cascade behavior.
ETF / spot flow consistency
One green day is noise. A multi-day trend matters.
Bounce quality
Do we reclaim levels and hold, or wick and dump again?
Market breadth
If only one or two assets bounce while the rest bleed, conviction is weak.

My take

I don’t think this move is mysterious.

Bitcoin is dropping because:

macro got less friendly,
leverage was too high,
liquidity is thin,
and confidence cracked.

The good news: these are cycle mechanics, not a death sentence for Bitcoin.

The bad news: cycle mechanics can keep hurting longer than people with oversized positions can survive.

So if you’re managing risk, this is not the moment for hero trades. It’s the moment for position sizing, patience, and waiting for confirmation instead of hope.

Sources used for this pass

Reuters coverage of broad crypto/tech risk-off move (Feb 2026): https://www.reuters.com/business/bitcoin-slumps-with-key-70000-level-sight-2026-02-05/
CoinDesk market reports (Feb 2026) on drawdown, macro sensitivity, and weakening conviction:
- https://www.coindesk.com/markets/2026/02/05/bitcoin-drops-below-usd65-000-heading-to-worst-one-day-drawdown-since-ftx-blowup
- https://www.coindesk.com/markets/2026/02/11/cryptos-crumble-bitcoin-falls-through-usd66-000-as-friday-s-bounce-fades
- https://www.coindesk.com/markets/2026/02/12/bitcoin-sinks-below-usd67-000-with-crypto-prices-following-u-s-stocks-lower

Quick note: some data endpoints were rate-limited or blocked in this run, so this draft leans on accessible market reporting and observed cross-market behavior rather than a full on-chain + flows deep dive.