Markets woke up to a bloodbath. Yesterday, February 6, 2026, Bitcoin (BTC) saw its sharpest daily drop in three years, plummeting from $88,000 to $60,200 in just a few hours. The Fear & Greed Index hit 'Extreme Fear' (4/100). What triggered the sell-off and should you buy the dip?
Table of Contents:
Timeline of Disaster: How It Happened
Events unfolded rapidly. On the morning of Feb 5, Bitcoin was trading comfortably in the $87,500 - $89,000 range.
- 04:15 UTC: A massive 15,000 BTC dump on Binance spot market. Price drops to $82,000.
- 04:30 UTC: Cascade liquidation of 50x and 100x longs kicks in. Price smashes through $75,000. HFT bots enter the game.
- 05:45 UTC: Panic peak. Bitcoin wick touches $60,200. Ethereum (ETH) drops to $2,800.
- 08:00 UTC: Institutions start buying the dip. Price stabilizes at $64,500.
Reason #1: The AI Liquidation Cascade
Glassnode analysts point to anomalous trading bot activity. There is a theory that a new version of trading agents on the Moltbook AI platform, receiving a liquidity drop signal, initiated a synchronous sell-off to hedge risks.
"It was a snowball effect," writes Bloomberg. "Thousands of independent AI agents made the same decision simultaneously, overloading order books."
Reason #2: The SEC Regulatory Strike
An hour before the crash, a draft of SEC bill "Regulation D-26" leaked on forums. The document proposes a total ban on non-custodial wallets (MetaMask, Phantom) for US citizens without biometric verification.
Inside Scoop from Maximilian K.
"The market overestimated the threat. D-26 is just a draft that won't pass the Senate. Smart Money used this news to shake out 'weak hands' and buy back at a 30% discount. I was buying at $62k."Drop Depth (24h)
BTC/USD Price Dynamics (48h)
Who Suffered the Most?
| Asset | Drop (24h) | Liquidations |
|---|---|---|
| Bitcoin (BTC) | -31.5% | $1.2B |
| Ethereum (ETH) | -38.2% | $850M |
| Solana (SOL) | -45.0% | $400M |
| Tether (USDT) | +0.8% | - |
Forecast: What's Next?
Uncertainty reigns in the market. There are two scenarios:
- V-Shape Reversal: If the SEC denies rumors within 24 hours, we will see a quick return to $80,000.
- Crypto Winter 2.0: If the $60,000 level fails to hold, the next support is at $48,000.
Editorial Advice: Do not use leverage. In such volatility, any leverage is deposit suicide.
Frequently Asked Questions (FAQ)
Is this the end of Bitcoin?
No. Bitcoin has "died" over 400 times already. Fundamentals are strong, hashrate is at ATH.
Should I buy now?
DCA (Dollar Cost Averaging) during such dips has historically been profitable. But don't bet the farm.
