Earthquake Now in Bitcoin Markets: An Analysis of the Price Collapse and Driving Factors

In a scene reflecting a state of severe instability, the cryptocurrency markets have experienced a strong downward wave over the past few weeks, with the turmoil not limited to Bitcoin alone but extending to most major altcoins. This price earthquake reflects a radical shift in trader sentiment and investor confidence in high-risk assets.

Bitcoin crashes from $81,000: Analysis of the strong downward wave

The decline began in late January 2026, when Bitcoin prices broke through historic support levels expected to hold. At that time, the flagship currency dropped from around $81,000 to new lows, losing more than 6% of its value within a few hours.

Today, after two weeks of that initial collapse, downward pressure remains, with prices slipping to around $66,000 (according to the latest data), representing an overall decline of nearly 18% from January’s highs. Ethereum and Solana were not immune to this wave, experiencing similar rapid and intense declines.

Fear index reaches its lowest levels: A radical shift in market sentiment

The Fear and Greed Index is one of the most important gauges reflecting market psychology. When Bitcoin approached $81,000 at the end of January, the index registered a level of 16 points, its lowest since the start of the year, indicating genuine panic among traders and investors.

This low level of the index reflects a state of surrender and intense fear of further declines. When market sentiment reaches such extreme levels, analysts typically look for potential reversal signals, but ongoing pressures suggest the market has not yet reached the desired stability point.

Federal Reserve decisions and liquidity expectations: the key factor behind the earthquake

The real analysis of this earthquake leads us to the macro side, where central bank decisions play a pivotal role in determining the direction of high-risk assets. The U.S. Federal Reserve announced a pause on interest rate hikes and Chairman Jerome Powell made hawkish statements regarding inflation and controlling liquidity.

At the same time, speculation increased about the appointment of Kevin Worch, known for his view of significantly reducing liquidity, which could add pressure on assets benefiting from abundant liquidity environments. Additionally, the liquidation of large buy positions and the closing of futures contracts at sensitive price levels contributed to deepening the decline.

In conclusion: The market between repeated support and further slipping

The market now stands at a critical crossroads. Either Bitcoin and other cryptocurrencies hold above certain levels and begin to gradually regain confidence, or they continue to slide toward lower levels. The current earthquake is not just an ordinary correction but a reflection of a fundamental shift in global monetary policy, and markets are still reacting to this new reality in a volatile and sharp manner.