The Bitcoin market is on the agenda of investors again, signaling a strong recovery after the sharp sales wave in the first week of February. According to data shared by crypto analysis company Santiment, increasing fear discourses on social media paved the way for a short-term price jump. BTC, which dropped to 60 thousand dollars during the day, then made a remarkable comeback by recovering towards 65 thousand dollars. While the uncertainty in the market continued, some investors put the 70 thousand dollar target on the table again.
Social Media Fear and Short-Term Recovery
In the analysis shared by Santiment on February 6, it was emphasized that after the Bitcoin price dropped to 60 thousand dollars, expressions such as “it will drop further” and “it will be below 60 thousand” increased rapidly on social media. The company reminded that similar statements in past data generally accompanied short-term price jumps. As a matter of fact, BTC partially confirmed the expectations by rising to the 65 thousand dollar band after the harsh sales.
According to the information provided by The Kobeissi Letter, the decline in question attracted attention with a loss of over 10 thousand dollars on a daily basis for the first time in Bitcoin history. During the same period, the liquidation of a high-volume leveraged position further increased the selling pressure. Santiment assessed that a significant portion of retail investors have withdrawn from the market, which could form the basis for a short-term relief rally.
While some market observers described the rise as a “dead cat bounce,” others argued that the level of fear had reached an extreme. Analysts note that periods when individual investors panic often result in temporary recoveries.
Derivative Markets, Liquidations and Long-Term Risks
On-chain and derivatives market data reveal a complex picture despite the price increase. DeFi commentator Marvelous stated that large investors took net short positions, while some whales and well-known names opened long positions. The expert argued that the rise seen after the liquidation of approximately $2.2 billion in long positions could be a mechanical reaction.
The fact that the open position amount in the futures market remained at high levels and the funding rates remained horizontal strengthened cautious approaches. Trader Sykodelic, on the other hand, stated that short positions gained weight in the liquidation map and claimed that there was only a long position of $100 million compared to a short position of approximately $29 billion. This imbalance led to comments that a possible short squeeze could push prices up.
CryptoQuant analysts stated that the current decline process is progressing faster compared to the 2022 bear market. According to the company’s data, Bitcoin lost 23 percent of its value in the 83 days after falling below its 365-day average. During the same period, the loss in 2022 was only 6 percent. Santiment, on the other hand, stated that investor perception towards Bitcoin and Ethereum has reached an “extremely pessimistic” point, and this may pave the way for short-term relief rallies.
