On February 6, 2026, bitcoin staged a dramatic rebound, rallying 15% from intraday lows below $60,000 to reclaim $71,000 and restore its market capitalization to over $1.4 trillion. The recovery came after a brutal selloff that virtually erased all gains from the so-called “Trump bump” since the 2024 U.S. presidential election, pushing the cryptocurrency to the brink of a structural bear cycle.
Liquidation Engine: The Mechanics of the Rebound
The rebound was as mechanical as it was emotional, fueled by a massive short squeeze. Data reveals that more than $120 million in bitcoin short positions were wiped out in a single hour as the price surged. Total leveraged liquidations across the crypto market exceeded $1 billion for the second consecutive day, highlighting the fragility of a highly leveraged ecosystem.
Equities Recover Amid Bargain Hunting and Trade Deal
U.S. equity indices also mounted a fierce counterattack. The Nasdaq composite surged over 400 points (+1.86%), the Dow Jones Industrial Average jumped 1,000 points (+2%), and the S&P 500 gained 1.65%. Despite the rebound, the Nasdaq remained down 1.65% over five trading days. Analysts attributed the earlier panic to institutional unloading — hedge funds sold U.S. single stocks at the fastest pace since October — combined with cooling labor data and rising skepticism over massive AI capital expenditures. However, sentiment shifted decisively after the announcement of the U.S.-Argentina Agreement on Reciprocal Trade and Investment, which lowers trade barriers, expands market access for American autos and agriculture, and establishes a framework for critical minerals.
Technical Extremes: RSI Below 21 Signals 'Mathematical Limit'
Matthew Sigel, head of digital asset research at VanEck, argued that the crypto carnage may have reached a mathematical limit as technical indicators hit historically distressed levels. “On a continuation chart of Bitcoin futures, momentum oscillators such as RSI have fallen below 21, an extreme oversold level that has historically preceded periods of stabilization and relief rallies,” Sigel said. He emphasized that while many investors cling to the four-year cycle narrative, recent price action has been driven more by leverage dynamics and institutional positioning than by cycle timing.