 ▲ Bitcoin (BTC) / ChatGPT-generated image |
Bitcoin (BTC), ahead of a massive $2.1 billion options expiry, has seen funding rates plunge to multi-year lows, entering a phase of directional searching amid intense price volatility.
According to cryptocurrency outlet CoinGape on February 6 (local time), Bitcoin retreated intraday to as low as $60,300, signaling unstable price action. However, bargain-buying demand pushed the price back to the $69,300 level, igniting hopes of a rebound. Still, with funding rates—a key indicator in the futures market—falling to their lowest levels since 2023, bearish sentiment among investors has grown dominant. Negative funding rates, in which short-position holders pay fees to long-position holders, suggest that market participants are increasingly positioning for further downside.
This volatility is being amplified by the $2.1 billion Bitcoin options expiry scheduled for later today. While the options market’s put/call ratio stands at 0.60, reflecting earlier optimistic expectations prior to the price drop, the wide gap between the maximum pain price of $80,000 and the current price puts many call options at risk of expiring worthless. Over the past 24 hours, more than $1 billion in positions have been forcibly liquidated, while open interest has also dropped sharply, indicating a rapid unwinding of leverage in the market.
Investor sentiment indicators have also entered a phase of extreme fear, raising expectations of a potential market bottom. The Crypto Fear & Greed Index has fallen to its lowest level in years, and historically such oversold conditions have often preceded major rallies. Meanwhile, a broader recovery across risk asset markets—highlighted by a more than 400-point rebound in the Nasdaq 100 and a 17% surge in Strategy shares—is creating a supportive backdrop for a Bitcoin rebound.
Weekly chart analysis shows the Relative Strength Index (RSI) entering oversold territory for the first time since July 2022, signaling the possibility of a technical rebound. After touching the $60,000 level—the downside target of a rising wedge pattern—Bitcoin formed a hammer candlestick and is attempting a trend reversal. If the weekly close finishes above $69,000, the hammer pattern will be confirmed as a strong rebound signal, potentially laying the groundwork for further upside.
However, the risk remains that the current rebound could prove to be a temporary dead-cat bounce. Market experts warn that unless Bitcoin decisively breaks through the $69,000 resistance level, it could once again turn lower and enter a phase of free fall. Changes in market liquidity following the $2.1 billion options expiry, along with macroeconomic variables, are expected to serve as a critical turning point for Bitcoin’s direction in the first quarter of 2026.
Disclaimer: This article is for investment reference purposes only, and no responsibility is assumed for investment losses incurred based on this information. The content should be interpreted solely for informational purposes.