Cryptocurrency prices edged higher today after the intense weekend sell-off cooled, showing the first signs of stabilization after several days of forced deleveraging.
summation
- Bitcoin and large altcoins rebounded in relief as the forced selling slowed.
- Clearings have declined sharply, easing pressure on derivatives markets.
- Despite early signs of stabilization, downside risks remain, analysts say.
Bitcoin is trading at $78,465 at press time, up 5.2% in the last 24 hours. The broader cryptocurrency market also continued to grow, with total market capitalization increasing 2.8% to $2.7 trillion.
Several large tokens followed BTC higher. BNB rose 5.3% to $769, Cardano rose 7.2% to $0.2975, and Avalanche rose 5.3% to $10.09. Despite the rebound, the market remains extremely fearful, as evidenced by the Crypto Fear & Greed Index rising 3 points to 17.
Trading activity showed early signs of recovery. Traders appear to be gradually re-entering the market following last week’s leverage flush, with total cryptocurrency open interest increasing 4% to $110 billion.
After the weekend capitulation, leveraging mitigation became easier.
This rebound comes after one of the most aggressive liquidation events since late 2025. Selling pressure was amplified by lack of liquidity over the weekend as overly leveraged long positions were pushed out across the market.
From January 31 to February 2, total liquidations continued to exceed $2 billion in a single session, reaching a peak of approximately $2.5 billion on February 1. Long positions accounted for most of the losses, wiping out thousands of traders and triggering a self-reinforcing cycle of margin calls and forced selling.
That pressure has been relieved. Clearings in the 24 hours fell 44% to about $401 million, a sharp decline from the weekend’s extremes, according to CoinGlass data. With most of the excess leverage being liquidated, liquidation-related selling has slowed, allowing dip buyers and long-term investors to participate without immediate pushback.
Additionally, the larger background has become somewhat more stable. Amid macro uncertainty, geopolitical tensions, and policy uncertainty, risk assets were sold off along with stocks and precious metals. As this pressure cooled slightly, cryptocurrencies followed suit, finding relief after reaching severely oversold levels.
Analysts warn that downside risks have not gone away.
Despite the price recovery, experts are still hesitant to declare a long-term bottom. Bitcoin is still down about 12% this week and about 40% from its October high of $126,000, keeping the market in a correction phase.
Views remain divided on what happens next, with some watching for consolidation and others warning of another leg down if macro stress arises again. Ray Youssef, CEO of NoOnes, said in comments shared with crypto.news that bearish sentiment is likely to dominate the first half of the year as capital continues to rotate into traditional safe havens.
“The recent cryptocurrency market sell-off occurred amid capital outflow into precious metals, whose prices are rising due to geopolitical and macroeconomic uncertainty,” Youssef said, adding, “Political risks and policy instability are greatly weighing on investor confidence.”
Youssef flagged the $73,000 area as a critical support zone for Bitcoin and warned that continued geopolitical pressure or a new wave of liquidations could push the price lower if buyers fail to defend it. He also pointed to Japan’s economic risks and global policy uncertainty as factors that could lead to outflows to the cryptocurrency market.
For now, traders appear to be focused on whether this bounce can outperform a short-term relief move. Much will depend on whether spot demand continues to absorb supply and whether leverage is curbed after one of the harshest cycle swings to date.