Crypto Daily: Week of 2/9

Welcome to Crypto Daily! While traditional markets navigate volatility, crypto never sleeps. Bitcoin crashed below $61K on Thursday triggering a 15% single-day plunge before rebounding above $70K on Friday as value investors moved in, Japan's historic pro-crypto election sent BTC surging toward $72K and gold past $5K, and analysts now call the $60K to $68K range the "final innings" of the crypto bear market. Today we're talking capitulation followed by aggressive recovery, Japanese policy catalysts, and why the next few weeks will determine whether we've seen the bottom.

Grab your coffee ☕ let's navigate the volatility...

🔥 THE BIG STORY

Bitcoin's $61K Capitulation Followed by Violent Rebound

Bitcoin plunged below $61,000 on Thursday, marking a 15% single-day drop and triggering over $2.56 billion in liquidations (the 10th-largest single-day event on record). The crash wiped more than $200 billion in value from the bitcoin market and sent the Fear and Greed Index into extreme fear territory. But here's where it gets interesting: Bitcoin violently rebounded above $70,000 on Friday as value investors moved in aggressively. Glassnode data shows broad-based accumulation emerging across all cohorts of bitcoin holders. Searches for "capitulation" doubled. This is the classic pattern: maximum fear followed by aggressive buying from long-term holders and value investors.

Why This Matters: When Bitcoin plunges to $61K and rebounds $9K+ in 24 hours, you're witnessing either the bottom of this correction or a dead-cat bounce before deeper lows. Compass Point analysts say we're in the "final innings of the crypto bear market," with $60K to $68K representing the range where long-term holders show buying conviction in past cycles. The key data point: 7% of long-term holder supply was acquired between $60K-$68K, creating strong support. Meanwhile, Japan's landslide pro-crypto election result sent BTC surging toward $72K as PM Sanae Takaichi raises hopes for major tax cuts on digital asset gains. Volatility is the certainty, but the setup favors buyers at these levels.

📊 WEEKLY PULSE

🎯 Bitcoin Range: Crashed to $61K Thursday, rebounded above $70K Friday, currently trading around $69-72K

💥 Liquidations: $2.56 billion wiped out Thursday, 10th-largest single-day liquidation event on record

🇯🇵 Japan Catalyst: Pro-crypto PM Takaichi's landslide victory sends BTC surging, Nikkei hits record 56,000

📈 Capitulation Signals: Searches for "capitulation" doubled as value investors moved in aggressively

🎯 Compass Point Final Innings of Bear Market: Compass Point analysts Ed Engel and Michael Donovan published a report Monday declaring we're approaching the "final innings of the crypto bear market." Their base case calls for bitcoin to bottom between $60K and $68K, a zone where long-term holders have shown buying conviction in past cycles. "We see very strong support within this range and our base case assumes BTC bottoms near $65K," they wrote. Of bitcoin owned by long-term holders (6+ months), 7% was acquired in this range, creating structural support. The $70K to $80K range is now an "air pocket" with little support, but below $60K would require a major risk-off shock similar to 2022.

⚡ Japan's Pro-Crypto Election Sends Markets Soaring: A landslide victory for pro-crypto Prime Minister Sanae Takaichi sent Japanese markets into overdrive and provided the catalyst for Bitcoin's Friday surge. The Nikkei hit a record 56,000 as markets priced in major tax cuts on digital asset gains and crypto-friendly regulatory reform. Bitcoin surged toward $72,000 on the news, while gold pushed past $5,000 as both safe havens and risk assets rallied on the policy shift. This is the kind of positive regulatory catalyst that can shift sentiment and provide the confidence boost markets need to sustain a recovery.

💡 Bernstein Reiterates $150K Target: "Weakest Bear Case in History" Analysts at Bernstein published a note this week reiterating their $150,000 bitcoin price target for 2026, calling the current downturn "a crisis of confidence rather than structural damage" and dubbing it the "weakest bitcoin bear case in history." Their reasoning: institutional infrastructure remains intact, ETF adoption continues despite outflows, regulatory progress advances, and the fundamental thesis (digital scarcity, institutional adoption, inflation hedge) hasn't changed. They acknowledge the $60K test was painful, but argue it cleared overleveraged positions and set up the next leg higher.

🎯 Key Support/Resistance Zones

• $60K to $68K: Compass Point base case for bottom, strong long-term holder support in this range

• $55K: Downside target if broader risk-off event occurs, matches average cost basis for all historical buyers

• $80K Resistance: Must reclaim this range to invalidate bearish setup and target previous highs

📚 Market Structure Check Bitcoin's violent swing from $61K to $70K+ in 24 hours demonstrates the extreme volatility analysts warned about. Predictions for 2026 range from $75K (Carol Alexander's low end) to $225K (bulls' high end), reflecting genuine uncertainty. What's changed: Bitcoin ETF holders are now 50%+ underwater after $3 billion in net outflows since mid-January, creating overhead resistance around $81-$83K. But the capitulation event on Thursday may have cleared enough weak hands to set up a more sustainable recovery. The question is whether Japan's pro-crypto policy shift and value investor accumulation can overcome macro headwinds.

🎭 MARKET PSYCHOLOGY

We're seeing the classic capitulation-to-recovery psychology. Thursday's $61K test triggered extreme fear, panic selling, and "is this the end?" narratives. Friday's violent rebound to $70K+ sparked "we just saw the bottom" optimism. The truth is probably somewhere between: we're likely in the bottom formation zone, but confirmation requires sustained trading above $70K-$75K without retesting the lows. Value investors and long-term holders are accumulating, "capitulation" searches doubled (historically a bottom signal), and Japan's policy shift provides a positive catalyst. But macro uncertainty remains.

🔮 WHAT'S NEXT

Watch whether Bitcoin can hold above $70K or whether we retest the $60K-$65K range. Monitor Japanese policy developments as PM Takaichi's administration details crypto tax reform plans. Track ETF flows; sustained outflows mean more overhead resistance, while inflow resumption could mark the confirmed bottom. Also watch US economic data and Fed signals; Bitcoin increasingly trades with macro conditions. The next 2-4 weeks will likely determine whether Thursday's $61K marked the cycle low or just a temporary stop on the way to $55K.

💭 MY TAKE

February 2026 is shaping up to be the month Bitcoin tested everyone's conviction to say the least. The crash to $61K cleared over leveraged positions and triggered genuine fear. The rebound to $70K+ demonstrated that value investors and long-term holders see these levels as attractive. Japan's pro-crypto election provides the kind of positive regulatory catalyst that can shift sentiment. Compass Point calling this the "final innings" of the bear market, Bernstein maintaining $150K targets, and broad-based accumulation emerging all suggest we're in bottom formation territory.

But volatility is certainty. The honest take: nobody knows if $61K was THE bottom or just A bottom. Position sizing matters more than timing precision ifykyk.

Question for you: Did you buy the $61K dip or are you waiting for confirmation above $75K-$80K before deploying capital? The market is forcing this decision now. Hit reply and tell your strategy!

That's all for today! 💪

Next week we will breakdown the technical case for $55K retest versus sustained recovery to $90K+, plus exclusive analysis on which macro catalysts could confirm the bottom or trigger another leg down.

Stay profitable,

Clayton

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