Crypto Market in the Red: BTC & ETH Slide as CeFi Takes the Biggest Hit

The cryptocurrency market plunged sharply on February 5, 2026, with major assets extending losses amid heightened risk aversion. Total market capitalization fell over 6% in the past 24 hours, driven by broad-based selling pressure.

Bitcoin (BTC) led the decline, briefly dipping below $70,000—its lowest level since November 2024—before paring some losses to trade around $70,000–$71,000 in various reports. This marked a roughly 7–8% drop in a single session, with the asset down significantly from its October 2025 peak above $126,000. Ethereum (ETH) followed suit, sliding below $2,100 at points and trading near $2,080–$2,130, reflecting declines of 7% or more.

Altcoins mirrored the downturn, but centralized finance (CeFi) tokens suffered the steepest hits. The CeFi sector dropped around 6.05%, with assets like Binance Coin (BNB) and Nexo posting heavy losses of 7–8%, amid resurfacing worries over regulation, liquidity risks, and exchange vulnerabilities. In contrast, some DeFi and niche projects showed relative resilience or gains.

Analysts link the sell-off to macroeconomic headwinds, including rising bond yields, expectations of tighter monetary policy, tech stock weakness spilling over, and delayed U.S. economic data due to a recent government shutdown. Derivatives markets saw surging liquidations—hundreds of millions in long positions wiped out—exacerbating the cascade as stop-losses triggered.

Sentiment turned deeply bearish, with the Fear and Greed Index plunging to “extreme fear” levels around 11. Some view the correction as a necessary reset after prior rallies, with long-term holders eyeing key support zones. Others warn of prolonged pressure unless global risk appetite stabilizes or positive regulatory/institutional catalysts emerge.

Investors remain watchful for macroeconomic signals and any shifts in policy or adoption trends that could spark recovery. Volatility is expected to persist in the near term.