Bitcoin falls below $70,000 to wipe out ‘Trump rally’
Background: The Origins of the ‘Trump Rally’
On 5 February 2026, the price of Bitcoin fell below the $70,000 threshold, a move that market analysts have identified as the formal conclusion of the price surge known as the ‘Trump rally’. This specific market cycle began in early November 2024, coinciding with the United States presidential election. During that period, the valuation of Bitcoin and other digital assets experienced a sharp upward trajectory, driven by expectations of a shift in federal regulatory policy and the potential for a more favourable environment for digital finance.
According to reports from the Financial Times, the initial rally in late 2024 was predicated on several key factors. These included the anticipation of a national Bitcoin reserve, the potential replacement of leadership at the Securities and Exchange Commission (SEC), and legislative efforts to integrate cryptocurrency more deeply into the traditional financial system. By the end of November 2024, Bitcoin had established a support level near $70,000, eventually climbing to significantly higher valuations throughout 2025.
The current decline to sub-$70,000 levels represents a full retracement of those gains. This price action indicates that the premium associated with the political shifts of late 2024 has been entirely removed from the asset’s market value. The Financial Times notes that this return to November 2024 levels marks a significant psychological and technical shift for institutional and retail investors who entered the market during the post-election surge.
Key Developments: The Tech Stock Correlation
The primary catalyst for the decline on 5 February 2026 was a broader sell-off in the technology sector. Bitcoin has increasingly demonstrated a high degree of correlation with high-growth tech stocks, particularly those listed on the Nasdaq. As institutional participation in cryptocurrency has grown through the proliferation of Spot Bitcoin Exchange-Traded Funds (ETFs), the asset has behaved less like an independent ‘digital gold’ and more like a high-beta risk asset.
Market data indicates that the sell-off began in the early hours of the trading day, as disappointing earnings reports from several major semiconductor and software firms triggered a retreat from risk-heavy positions. As the Nasdaq experienced a single-day decline of over 3 per cent, Bitcoin followed a similar trajectory, breaking through several key support levels. The breach of the $72,000 mark triggered a series of automated sell orders, which accelerated the descent toward the $69,000 range.
The Financial Times reports that the liquidation of leveraged positions played a substantial role in the speed of the decline. In the 24 hours leading up to the price drop, approximately $400 million in long positions were liquidated across various digital asset exchanges. This cascade of liquidations created a feedback loop, where falling prices forced the closure of more positions, further depressing the market value.
Impacts: Institutional and Retail Consequences
The fall below $70,000 has immediate implications for institutional holders who increased their exposure during the 2025 peak. Many corporate treasuries and institutional funds that utilised the post-election momentum to justify large-scale purchases are now facing unrealised losses. For instance, entities that followed the ‘MicroStrategy model’ of aggressive acquisition are seeing their average entry prices tested by the current market volatility.
Furthermore, the impact on the Spot Bitcoin ETF market has been pronounced. These financial instruments, which saw record inflows throughout 2025, are now experiencing a period of sustained outflows. As the price dipped below the $70,000 mark, several large-scale ETF providers reported a shift in investor sentiment, with many retail participants opting to move capital into more stable assets, such as short-term government bonds or money market funds.
The broader cryptocurrency ecosystem has also felt the impact. Ethereum and other major altcoins have seen proportional or, in some cases, more severe declines. The total market capitalisation of the digital asset sector has contracted significantly, reflecting a general reduction in liquidity. According to the Financial Times, the ‘wipe out’ of the Trump rally gains has led to a re-evaluation of the long-term price targets that were set during the height of the 2025 bull market.
Reactions: Market Sentiment and Analyst Perspectives
The reaction from the financial community has been one of cautious observation. Analysts have noted that the return to November 2024 levels suggests that the market is currently lacking a new fundamental catalyst to drive prices higher. The ‘Trump rally’ was built on the expectation of specific policy outcomes, and as those policies have either been implemented or faced legislative hurdles, the market has shifted its focus back to macroeconomic indicators.
Financial commentators have pointed out that the current sell-off is not necessarily a reflection of a failure in Bitcoin’s underlying technology, but rather a symptom of the current global economic climate. High interest rates and persistent inflation concerns have made investors more sensitive to risk. When the technology sector faces headwinds, Bitcoin is often among the first assets to be sold to cover losses in other areas of a portfolio.
In the United Kingdom, financial regulators have maintained a neutral stance, though they continue to monitor the impact of such volatility on retail investors. The Financial Times highlights that the current price action serves as a reminder of the inherent volatility of the asset class, despite its increasing integration into mainstream finance. The sentiment among professional traders appears to be focused on identifying the new ‘floor’ for the asset, with many looking at the $65,000 to $68,000 range as the next area of potential support.
Next Steps: Future Market Outlook
Looking ahead, the trajectory of Bitcoin will likely remain closely tied to the performance of the broader technology sector and upcoming macroeconomic data releases. Investors are particularly focused on the next set of inflation figures and the subsequent policy decisions by the Federal Reserve. If the tech sell-off continues, there is a possibility that Bitcoin could test lower support levels that have not been seen since the middle of 2024.
Details remain unclear regarding the specific timing of any potential recovery. Some market participants suggest that a period of consolidation is necessary to wash out the remaining speculative leverage from the system. This process of ‘price discovery’ is expected to take several weeks, if not months, as the market adjusts to the absence of the political momentum that sustained it throughout the previous year.
The Financial Times reports that institutional interest in the underlying blockchain technology remains stable, even if the spot price of the asset is under pressure. Development in the areas of Layer 2 scaling solutions and institutional custody services continues, suggesting that the long-term infrastructure of the market is still expanding. However, for the immediate future, the focus remains on whether Bitcoin can maintain its position above the $65,000 mark or if the retracement of the ‘Trump rally’ will extend into a deeper market correction.
In summary, the events of 5 February 2026 mark a pivotal moment in the current market cycle. By falling below $70,000, Bitcoin has effectively reset the gains of the last fifteen months, returning to a valuation baseline established before the 2024 US election. The correlation with the technology sector remains the dominant force in price action, and the market is now entering a phase of heightened scrutiny as it seeks to establish a new equilibrium in a post-rally environment.