On February 5, 2026, at 8:00 AM UTC+8, the price of Bitcoin quickly fell below the $71,000 mark, currently reported at approximately $70,945.49, with a 24-hour decline expanding to 7.5%. Ethereum also briefly dropped below $2,100, with a daily decline of about 8.66%. The overall market is showing a pattern of sharp corrections from high levels with increased volume. Amidst the price volatility, a rare combination has emerged on both the on-chain and derivatives fronts: on one hand, some large whales have chosen to sell at a loss on several high-risk small-cap tokens; on the other hand, accounts viewed by the market as "ultimate bears" have reduced their short positions by 31.57 BTC. Concurrently, the U.S. Ethereum spot ETF saw a net outflow of $78.11 million in a single day, combined with analysts' views on the strengthening dollar suppressing risk assets, leading to a general association of this decline with the resonance effect of macro liquidity and institutional capital withdrawal.

Bitcoin's Daily Decline of 7.5%: Volatility Profile

● Market data shows: According to multiple sources, Bitcoin is currently priced at $70,945.49, with a 24-hour decline of about 7.5%. The daily volatility has significantly increased, with prices rapidly sliding from the upper range to around $71,000, indicating intense short-term trading activity. Such a level of daily retracement suggests that leveraged positions or funds chasing prices at high levels have experienced significant unrealized losses and passive liquidation pressure, with technical support levels being quickly breached.

● Ethereum Weakens in Tandem: According to single-source data, ETH briefly fell below the $2,100 mark within the same trading day, with a 24-hour decline of about 8.66%, demonstrating higher volatility elasticity compared to BTC. Given that ETH possesses attributes of both smart contract infrastructure and derivative ecosystem assets, its simultaneous deep drop has amplified market concerns regarding the overall on-chain activity and the revaluation of related sectors such as DeFi and NFTs.

● Adjustment Levels and Cycles: According to single-source calculations, as of February 4, Bitcoin has cumulatively retraced about 27% from its historical peak. This recent sharp decline, combined with prior slow adjustments, elevates this drop from "intraday volatility" to a "phase of intermediate adjustment." Such a magnitude of retracement often corresponds to a sentiment retreat during the mid-to-late stages of a cycle, rather than a simple corrective pullback that can be easily repaired by short-term emotional release.

Whale Losses of $8.49 Million and Ultimate Bears Reducing Positions

● High-Risk Positions Recognizing Losses: According to a single source, a whale address has accumulated losses of about $8.49 million from selling small-cap tokens such as AERO, BRETT, and VIRTUAL, indicating a clear contraction in its risk appetite for high-beta assets. Choosing to concentrate on "cutting losses" during a sharp correction phase suggests that this portion of capital has lost confidence in the liquidity of small caps and is more inclined to reduce positions with the highest volatility to hedge against further market downturn risks.

● "Ultimate Bears" Choose to Reduce Positions: In contrast to the whale's loss recognition, according to a single source, accounts viewed as "ultimate bears" have reduced their short positions by 31.57 BTC, corresponding to a nominal scale of about $224.56 million. Actively reducing short positions in a clearly weakening price environment indicates a more restrained expectation for future space, or a belief that the current decline has realized phase gains, thus diminishing the marginal attractiveness of continuing to amplify the profit/risk ratio.

● Discrepancy Between Long and Short Positions and Whale Behavior: On one side, high-risk whales are concentrating on stop-losses in small-cap coins, while on the other side, structural bears are choosing to reduce leverage. This behavioral discrepancy exacerbates short-term price uncertainty. The sell-off of small-cap tokens amplifies the overall contraction in risk appetite, dragging sentiment towards mainstream coins like BTC and ETH; while the reduction of short positions weakens the trend-based selling pressure, leaving the market lacking a unified direction to continue "trampling" after breaking key price levels, resulting in a high-volatility, low-certainty oscillation range. The market structure in the short term appears to be a mix of passive deleveraging and active risk aversion.

Ethereum Spot ETF Daily Outflow and Institutional Withdrawal

● Net Outflow Data: According to a single source, the U.S. Ethereum spot ETF recorded a net outflow of $78.11 million on the previous trading day, having previously been viewed as an important entry point for institutional compliance exposure. A near $80 million outflow in a single day indicates that some institutions or professional investors are choosing to systematically reduce their positions at high ETH prices, reassessing the short-term risk-reward ratio of Ethereum assets.

● Suppression of ETH Spot and Overall Risk Appetite: The redemption mechanism of the spot ETF directly affects the spot buy-sell orders. Continuous or increased net outflows mean that the secondary market needs to absorb corresponding selling pressure, thereby raising the risk premium for incoming capital. For ETH, the withdrawal of ETF funds combined with the price dropping below $2,100 makes it difficult for the spot market to stabilize quickly under dual pressures of technical and capital, also suppressing the "beta sentiment" of the entire crypto asset sector, pushing funds towards assets with higher safety margins.

● Institutional Logic of BTC and ETH Corrections: The simultaneous volume correction of BTC and ETH, along with the significant net outflow from the ETH spot ETF, points to a phase of withdrawal primarily led by institutional funds. Since the ETF's component assets are centered around spot BTC and ETH, when the macro environment and expectations for dollar liquidity become less favorable, institutions often first adjust their exposure through ETF channels, followed by a rebalancing of on-chain and over-the-counter structures, manifesting in the market as mainstream coins leading declines while small-cap coins passively follow suit in a chain reaction.

Strengthening Dollar and Organized Selling Concerns

● Strengthening Dollar Suppresses Safe-Haven Assets: According to a single source, analyst Fawad Razaqzada pointed out that if the trend of a strengthening dollar continues, it will suppress the prices of safe-haven assets represented by gold. The extrapolated implication of this view is that assets like Bitcoin and Ethereum, which are priced within the global liquidity framework, will also face dual pressures of rising valuation discount rates and declining risk appetite when the dollar strengthens and expectations for real interest rates rise, thereby weakening their attractiveness as "digital asset allocation targets."

● Market Interpretation of Organized Selling: Veteran trader Peter Brandt views the characteristics of this decline as "more akin to organized selling," a judgment that reflects his personal opinion rather than a consensus. Organized selling refers more to concentrated, large, and rhythmically uniform selling behavior near key price levels, causing candlestick patterns to show continuous breakouts and unilateral volume without typical "emotional panic" oscillation patterns.

● Emotional Resonance of Macro and Selling Pressure: Without speculating on specific triggers without data, it can be seen that the expectations of a strengthening dollar and market concerns about macro uncertainty have created a tight emotional backdrop for risk assets. Once organized or concentrated selling is initiated at high levels, it is more likely to be amplified by the market under the framework of "strong dollar + institutional deleveraging," leading to a resonant adjustment of prices, emotions, and capital flows, though the deeper drivers behind it still require more authoritative data for validation.

On-Chain Movements: DOGE Whales Shifting to SOL Lockup

● DOGE Whales Adjusting to SOL: According to a single source, a whale that has been active in the DOGE ecosystem recently withdrew 94,100 SOL from related platforms, valued at approximately $8.75 million at current prices, with on-chain indications suggesting that this position may continue to be used for staking. In the context of an overall market correction, the transfer of nearly ten million dollars into a high-performance public chain and the choice to lock it up reflects a relative optimism about SOL's long-term network utility and staking returns.

● Contrast Between Small-Cap Loss Selling and Long-Term SOL Lockup: On one hand, whales are recognizing losses and exiting high-risk small-cap tokens like AERO, BRETT, and VIRTUAL; on the other hand, they are increasing their potential long-term staking allocation in SOL. This stark contrast illustrates the repricing process of capital between assets of different risk levels. The former is seen as a speculative target with weak liquidity and high narrative elasticity, while the latter is more integrated into "core public chain positions" supported by ecological foundations and technological routes.

● Capital Redistribution Between Mainstream Coins and High-Performance Public Chains: This type of asset switching behavior releases two signals: first, high-risk small-cap coins are the most likely to be abandoned during periods of amplified volatility, becoming the chips that whales prioritize for reduction; second, some capital has not completely exited the crypto market but has shifted from "satellite assets" outside of BTC and ETH to high-performance public chains like SOL, seeking risk-adjusted returns in more certain network growth and staking yields, pushing the market structure from a single Bitcoin dominance to a more diversified multi-chain balance.

Institutional Capital Withdrawal and Retail Sentiment's Next Steps

The current round of correction, considering signals such as the BTC/ETH price retracement, the $78.11 million net outflow from the Ethereum spot ETF, and the $8.49 million loss selling by whales in small-cap tokens, appears more like a defensive withdrawal led by institutions and large capital rather than pure retail panic. Expectations of a strengthening dollar and unverified macro uncertainty may still phase out the valuations of risk assets, including crypto assets, prompting capital to prefer locking in profits and reducing leverage at high levels. In the short term, the price volatility range may maintain high-level oscillations or even continue to seek a bottom, with emotional recovery requiring time and incremental capital support; in the medium term, judgments need to return to the resonance of macro interest rate paths, ETF fund trends, and on-chain fundamentals. In the absence of clear data support, market participants should avoid making aggressive moves based on unverified rumors or simplified narratives, focusing more on position management and diversified allocations to hedge against uncertainty.

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