 ▲ Bitcoin and Ethereum plunge/ChatGPT-generated image © |
Bitcoin and Ethereum have consecutively broken below key support levels and entered technically severe oversold territory, but a mixed macroeconomic backdrop and a solid bearish market structure make a trend reversal unlikely. Sticky inflation and a still-resilient labor market have dampened expectations for an early rate cut by the Federal Reserve, weighing on risk asset sentiment.
According to investment outlet FXStreet on February 12 (local time), altFINS analyst Marek Hric said Bitcoin (BTC) is facing strong technical pressure after breaking below the resistance zone between $74,000 and $80,000 and surrendering the $70,000 support level. Bitcoin briefly touched the $60,000 support area after its Relative Strength Index (RSI) fell below 20, signaling extreme oversold conditions, before rebounding to trade around $67,000. The analyst noted that Bitcoin is likely to retest the $60,000 level before attempting to reclaim $74,000, suggesting a strategy of buying near $60,000 with a stop-loss set at $57,000.
Technical indicators continue to point to bearish dominance. The Bitcoin chart confirmed a breakdown from a Bear Flag pattern, increasing the likelihood of continued weakness. The price remains well below the 200-day Simple Moving Average (SMA) at $101,500, confirming a long-term downtrend. The RSI stands at 30.7, close to oversold territory, while the Moving Average Convergence Divergence (MACD) remains deep in negative territory, indicating strong downside momentum. Unless Bitcoin reclaims $74,000, structural weakness is expected to persist.
Ethereum (ETH) is also struggling after falling below the $2,400 level. Currently trading around $1,975, it is testing a key support zone between $2,000 and $2,100. A breakdown from a descending channel has confirmed the potential for further declines, and Ethereum remains well below its 200-day moving average at $3,580. The RSI stands at 29, indicating severe oversold conditions; however, if the $1,800 support level gives way, the downtrend could accelerate further.
The macroeconomic environment in February 2026 is also unfavorable for the crypto market. In January, U.S. headline Consumer Price Index (CPI) rose 2.7% year-over-year, while core CPI increased 2.6%, showing that inflation is not decisively moving toward the Federal Reserve’s 2.0% target. Meanwhile, the labor market remained solid, with nonfarm payrolls rising by 130,000 and the unemployment rate falling to 4.3% in January, dampening market expectations for aggressive rate cuts. At its latest meeting, the Fed held rates steady at 3.50%–3.75%, maintaining a data-dependent stance.
In conclusion, while the current liquidity environment is not restrictive, it is also not actively accommodative. Although both Bitcoin and Ethereum are technically oversold, they remain trapped in a structural bear market, meaning that without a clear dovish pivot from the Fed or a recovery of major resistance levels, each rebound is likely to face selling pressure.
Disclaimer: This article is for investment reference purposes only and does not assume responsibility for any investment losses based on it. The content should be interpreted for informational purposes only.