why does bitcoin keep dropping

Bitcoin's recent price drops stem from a mix of macroeconomic pressures, market liquidations, and shifting investor sentiment, with the cryptocurrency hitting lows around $72,000-$73,000 as of early February 2026.

Key Reasons

Several interconnected factors have fueled Bitcoin's decline over the past week, turning a high-flying asset into a cautionary tale of volatility.

• Macroeconomic Headwinds : Persistent inflation data and Federal Reserve signals have delayed expectations for interest rate cuts, strengthening the U.S. dollar and pressuring risk assets like Bitcoin. This shift favors "certainties" over speculative plays, as capital flees to traditional safe havens.

• Liquidations and Thin Liquidity : Over $2 billion in Bitcoin positions (both long and short) were liquidated since late January, creating a domino effect—especially during low-volume weekends. Breached technical levels accelerated leveraged position unwinds.

• Institutional and Geopolitical Pressures : Fading institutional demand, outflows from crypto treasuries, and hawkish Fed nominee Kevin Warsh (nominated by President Trump) have eroded confidence. Geopolitical risks and tech stock slumps, including Microsoft-related downturns, added to the risk-off mood.

Recent Timeline

Bitcoin's fall has been swift and brutal, down over 40% from its $125,000 October 2025 peak.

1. Late January : Largest daily drop since 2018 after Warsh nomination news.

2. February 2 : Dipped below $80,000 amid global equities selloff and precious metals liquidation.

3. February 4 : Plunged to $72,010 low, lowest since November 2024.

4. February 5 : Hovering near $73,000 with ongoing institutional cuts reducing trading volume.

Market Sentiment

"The drop to $72,000 isn't merely a technical anomaly; it's a wake-up call. The market is beginning to understand that narratives can't pay the bills." – Analyst via Forbes

Forum chatter echoes this: Reddit users point to seller-buyer imbalances and CME gaps filling, while analysts note retail shifting to mainstream assets. Despite the pain, Bitcoin remains 370% above early 2023 levels, hinting at resilience amid "diminishing returns" in bull cycles.

Broader Context

This isn't isolated—crypto mirrors equities and metals amid economic contraction fears. While ETF outflows and stalled regulations weigh heavy, some see it as a healthy reset before potential recovery, though near-term catalysts feel scarce.

TL;DR : Bitcoin's "keep dropping" stems from Fed hawkishness, massive liquidations, and risk aversion—not fundamental rot, but a speculative unwind in real time.

Information gathered from public forums or data available on the internet and portrayed here.