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Bitcoin holds key support as 'extreme fear' grips traders

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Bitcoin holds key support as 'extreme fear' grips traders

Major cryptocurrencies eased off overnight highs during Asia trading, with bitcoin steady above a critical support zone even as investor sentiment remains deeply bearish.

By Oliver Knight, Omkar Godbole|Edited by Sheldon Reback
Updated Feb 3, 2026, 12:26 p.m. Published Feb 3, 2026, 11:30 a.m.
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Fear grips crypto market (Patrick Hendry/Unsplash)

What to know:

  • Bitcoin and ether held above support levels during Asian trading. The broader crypto market showed weakness even as equities and precious metals rallied.
  • Investor sentiment remains highly negative, with the Fear and Greed index at 17/100 as some analysts warn the market’s structural downside risk is still unresolved.
  • Altcoins saw a sharp bounce, with HYPE surging over 70% in a week. POL, LIT and MORPHO gained and privacy coins like XMR and ZEC extended declines.

The crypto market held above a critical level of price support during Asia hours, with bitcoin BTC$78,212.51 changing hands at $78,400 and ether ETH$2,295.52 at $2,290.

Since midnight UTC, other major cryptocurrencies gave back some of their gains while precious metals and U.S. equities rallied, demonstrating relative weakness across the crypto sector.

STORY CONTINUES BELOW
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The Fear and Greed index is at 17/100, a reading of "extreme fear," as investors begin to accept the reality that October's high was the bull-market peak and the subsequent correction was indeed a reversal into a bear market.

While some analysts say the bear market will be short-lived with bitcoin approaching a key price floor at $60,000, a CryptoQuant analyst said the market is weakening structurally and downside risk remains unresolved.

The one outlier from the bearish sentiment is HyperLiquid's HYPE token, which has risen by more than 70% in the past week in light of a spike in volume across its silver futures market, suggesting participation from retail traders.

Derivatives positioning

  • Bitcoin's annualized 30-day implied volatility remains above its 200-day simple moving average, indicating potential for more price turbulence ahead. The same is true of ether.
  • Over $300 million in leveraged crypto futures bets have been liquidated by exchanges in 24 hours. Still, notional open interest (OI) in crypto futures has stabilized at multimonth lows near $110 billion.
  • In the past 24 hours, futures OI in major coins, including BTC, ETH, SOL and XRP has declined. HYPE futures stand out with a near 20% increase in open interest. The discrepancy indicates deployment of capital likely on the bullish side, expecting more gains in the token.
  • Annualized perpetual funding rates for majors remain slightly positive, indicating a muted bullish skew.
  • On Deribit, the premiums for BTC and ETH puts weakened somewhat from Monday. Puts, however, remain pricier across multiple expiries, a sign of lingering downside expectations.
  • Block flows featured demand for bitcoin strangles, a volatility strategy, and ether risk reversals, a low-cost hedging strategy.

Token talk

  • HyperLiquid's HYPE advanced, a gain that can be attributed to rising volumes and revenue, and much of the broader altcoin market also rebounded on Tuesday. Polygon's POL token, as well as LIT and MORPHO, posted gains of as much as 13% over the past 24 hours.
  • The advances follow a low-liquidity weekend selloff that thrust several assets into "oversold" territory. In a low-liquidity environment, where market depth is lacking, altcoins will often make exaggerated moves as the demand for instant buy or sell orders cannot be met by resting bids and asks on the orderbook.
  • Privacy coins monero XMR$385.41 and zcash ZEC$286.65 failed to extend their a strong starts to the year. Both are down by more than 20% in the past week, with a further 3.5% selloff since midnight.
  • Another asset that has been immune to the recent sell pressure has been layer-1 blockchain Canton's CC token, which added 28% in the past week on the back of participation from institutional investors.
  • Canton chain is privacy-enabled blockchain designed for institutional finance and real-world asset (RWA) tokenization. In December it was announced that Wall Street giant DTCC had struck a deal with Canton to tokenize U.S. Treasury securities on the blockchain.
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