Key Points
- Crypto markets rebounded after a liquidity-driven crash, adding over $100 billion in market value.
- Bitcoin’s price recovery depends on maintaining key weekly support near $75,000.
The cryptocurrency market is showing signs of recovery following a liquidity-driven sell-off over the Feb. 1 weekend.
Bitcoin (BTC) rose about 4% to trade near $78,000, while major altcoins such as Ethereum (ETH) climbed between 4% and 5%.
The rebound coincides with easing global tensions, including progress on a US-India trade agreement and planned diplomatic talks between the US and Iran on Feb. 6.
Market Recovery and Macro Drivers
The broader crypto market added more than $100 billion in total capitalization within 24 hours after heavy selling pressure pushed prices sharply lower on Feb. 2.
Market data from Coinglass shows liquidations totaling $324 million over the past day, with short positions accounting for $231 million of that figure.
On the macroeconomic front, the United States and India agreed to a trade deal that lowers tariffs on Indian goods from 50% to 18%, helping improve overall risk sentiment.
According to The Washington Post, US and Iranian officials are also expected to meet in Istanbul, with mediation support from Turkey, Qatar, Egypt, and other regional actors.
US officials additionally met with representatives from crypto firms and banks to discuss a proposed crypto market structure bill, aiming to reduce regulatory uncertainty.
Bitcoin Price Outlook
After falling to around $75,000, Bitcoin staged a relief bounce and is trading close to $78,700.
On the weekly chart, BTC remains below its 20-week and 50-week moving averages, indicating subdued momentum despite the recent rebound.
Technical analysis outlines a bullish scenario where Bitcoin holds the $75,000 region, forming a higher low that preserves the broader uptrend.
A sustained weekly close above the 50-week moving average near $100,400 would signal a potential shift back in favor of buyers.
If price instead breaks below the April 2025 low, the higher-low structure would be invalidated, increasing downside risk toward the $50,000–$60,000 range.
Overall market direction remains closely tied to whether Bitcoin can maintain the $75,000 level on weekly closes.
