Crypto Daily Report 02.03: Bitcoin Falls Below $76,000 to Near One-Year Low, Market Enters Deep Deleveraging and Confidence Crisis Stage

I. Bitcoin Price Drop and Market Dynamics
1. Bitcoin prices continued to decline in early February 2026, breaking the key $80,000 threshold and dropping to a low of $76,000, the lowest in nearly a year, representing a roughly 40% retracement from the 2025 high, and marking the fourth consecutive month of decline—the longest streak since 2018.
2. Market liquidity has significantly shrunk, down over 30% from October peak, similar to levels after the 2022 FTX collapse. Low liquidity during weekends has intensified volatility, triggering large-scale leveraged long liquidations, with over $2.5 billion in total contract liquidations across the network within 24 hours.
3. Market confidence is waning without clear trigger factors. Lack of buying interest, waning momentum, and weakening conviction have led to sustained price declines. The correlation between Bitcoin and safe-haven assets like gold and silver has weakened, and responses to geopolitical tensions and a weakening dollar are sluggish.
4. Institutional holdings are under pressure. MicroStrategy and 11 spot ETFs hold about 10% of circulating supply, with an average cost basis of approximately $85,360, and an overall unrealized loss of about $7 billion. Their preferred stock dividends have been increased to 11.25% to attract capital, but high dividend costs may pose cash flow risks.
5. Technical analysis shows a break below the ascending wedge pattern, with short-term support levels breached. Market expectations for the next recovery phase are extended, possibly taking 6-9 months, and facing competition from AI stocks and precious metals, which weakens Bitcoin’s appeal as a hedge.

II. Ethereum Market Dynamics
1. Ethereum (ETH) declined in tandem with Bitcoin, with prices briefly dropping to $2,300. Approximately $1.1 billion worth of ETH positions were liquidated within 24 hours, and funding rates fell to -0.028%, reflecting deleveraging pressure.
2. Technical support levels have been broken, forming lower highs and lower lows. The weekly RSI trend is below neutral, and MACD remains negative, indicating weakening demand. Short-term support is concentrated between $2,400 and $2,600, with potential further decline to $2,000–$2,200 if support is broken.
3. Institutional holdings face pressure. In BitMine’s portfolio, ETH was acquired at an average cost of $3,800, with current prices around $2,430–$2,450, resulting in an unrealized loss of about $5.9 billion, nearly a 40% retracement. The cost basis has shifted into a resistance level.
4. Reflecting the market’s deleveraging phase alongside Bitcoin, panic-driven capital flows dominate, and market depth has temporarily disappeared. A macroeconomic risk easing, new capital inflows, and spot demand recovery are needed to reverse the downward trend.

III. Institutional Holdings and Market Confidence (Using MSTR as an Example)
1. MicroStrategy Chairman Michael Saylor plans to increase Bitcoin holdings when prices fall to $78,000, but large purchases are limited due to poor performance of the company’s common and preferred stocks, raising doubts about the execution capability.
2. MicroStrategy and 11 spot Bitcoin ETFs hold about 10% of circulating supply, with an average cost basis of approximately $85,360, and an overall unrealized loss of about $7 billion. MicroStrategy alone holds 712,647 BTC, with an average cost of about $76,037, and its safety margin has narrowed to less than 3%.
3. To maintain its buying strategy, the company has increased the dividend on Series A perpetual preferred stock (STRC) to 11.25% to attract funds. This high-cost financing could trigger cash flow risks. If prices continue to fall or break below cost, high-cost institutional holdings may turn into selling pressure.
4. Market skepticism about the “institutional entry” narrative is growing, with the old money story losing effectiveness. Without new buying interest, institutional holdings could become a source of market pressure. Fresh capital inflows and narrative restructuring are needed to boost confidence.

IV. Other Mainstream Cryptocurrencies (XRP, SHIB)
1. XRP prices continue to decline, approaching the $1 psychological level, with trading near $1.60. Momentum indicators weaken, key support zones collapse, and short-term recovery hopes are slim.
2. Shiba Inu (SHIB) enters its most severe crash period of 2026, with prices falling below key support levels, experiencing heavy sell-offs, and market expectations for a short-term rebound remain low.
3. After Bitcoin drops below $80,000, major cryptocurrencies broadly decline, with Ethereum, SOL, Dogecoin, and others falling in unison. This cross-asset correction reflects subdued macro sentiment, with market funds shifting from risk assets to safe havens.