Santiment says extreme fear after Bitcoin’s $60K drop helped trigger a rebound, with a potential push toward $70K.
Bitcoin (BTC) slipped to around $60,000 earlier today before rebounding toward $65,000, following one of the sharpest daily sell-offs in its history.
The move has split traders between those calling the rebound a temporary technical reaction and others pointing to extreme fear as a setup for a recovery toward $70,000.
Fear Spikes as Bitcoin Rebounds From Sell-Off
On February 6, Santiment noted that social media mentions calling for Bitcoin to go “lower” or “below” shot up after the drop to $60,000, a pattern the analytics firm said often appears near short-term price rebounds.
The asset did indeed bounce back to about $65,000, with the uptick coming after what The Kobeissi Letter described as BTC’s first-ever daily drop of more than $10,000, alongside claims that a large leveraged position had been liquidated.
“Is this nothing but a dead cat bounce?” Santiment asked, while positing that enough retail may have been shaken out to justify a quick rally back up to the $70,000s.
The sell-off capped weeks of heavy downside pressure, as CryptoPotato previously reported, with Bitcoin wiping out gains seen after Donald Trump’s re-election and dragging most major altcoins lower. XRP fell 13% on the day, while Ethereum, Solana, and BNB also posted steep losses.
Meanwhile, on-chain and derivatives data are painting a mixed picture beneath the rebound. According to DeFi commentator Marvellous, “smart money” has taken a net short position, while whales and public figures are adopting long positions. The market watcher argued the move looked more like a mechanical response after $2.2 billion in long liquidations than renewed conviction, noting that open interest remained elevated and funding rates had stayed flat.
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Elsewhere, trader Sykodelic highlighted a lopsided liquidation map, claiming the market had cleared most long positions, leaving roughly $29 billion in shorts versus about $100 million in longs over a one-year view.
Price Action Shows Heavy Damage Despite Short-Term Bounce
Bitcoin was trading around the $65,000 level at the time of writing, down nearly 9% in the last 24 hours and more than 21% over the past seven days. Across the previous month, the losses stand close to 30%, pushing BTC about 48% below its peak from October 2025, when it surpassed the $126,000 mark.
Analysts from CryptoQuant have said that the current downturn is developing faster than the 2022 bear market, with their data showing the OG cryptocurrency fell 23% within 83 days of losing its 365-day moving average, compared with a 6% decline over the same period in early 2022.
Santiment added that sentiment toward both Bitcoin and Ethereum (ETH) had turned “extremely bearish,” a condition that can coincide with short-lived relief rallies when retail fear stays elevated.
For now, traders remain divided. Some see the concentration of short positions and fearful sentiment as fuel for a move back toward $70,000, while others have warned that without a collapse in open interest and prolonged sideways trading, the recent bounce may only be the precursor to another test of lower levels.
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