Recent Bitcoin price drops may be due to two main reasons. According to data from Cryptoquant and Xwinfinance, one factor is the prolonged government shutdown, which has increased market pressure. "The US government shutdown disrupts liquidity, putting pressure on Bitcoin. Although the Congressional Budget Office (CBO) expects Bitcoin prices to temporarily rebound after the shutdown ends, on-chain data shows that restoring confidence and capital will take longer," says Xwinfinance.

Additionally, the latest data shared by Kobeissi Letter indicates that leverage is a primary reason Bitcoin has fallen below the $100,000 mark. "The key question: What is really happening in the crypto market? Since October 6, the market cap has evaporated by over $1 trillion. But why? The answer seems more related to technical factors than fundamentals. Cryptocurrency adoption remains at historic highs, deregulation is in full swing, and technology is advancing rapidly. However, leverage levels have reached unprecedented heights, amplifying market volatility—such as the $20 billion liquidation on October 10. So, when uncertainty arises or technical momentum weakens, the downward moves tend to be exaggerated."

Can Bitcoin recover quickly?

Based on recent statistics, Bitcoin is expected to reach $136,000 by February 2026 and could recover soon. The latest Bitcoin price forecast predicts that by February 2, 2026, Bitcoin will have increased by 34.42%, reaching $136,245.

Currently, market sentiment is bearish, with the Fear and Greed Index at 21 (Extreme Fear). Over the past 30 days, Bitcoin has risen 14 days (47%), with a volatility of 4.53%.