On Monday, investors displayed a greater willingness to embrace risk, leading to a notable recovery across both leading cryptocurrencies and traditional assets. Bitcoin, Ethereum, Dogecoin, gold, and silver all saw gains, alleviating some of the recent market pressures. Despite some analytical warnings about a potential bear market in Bitcoin, one analyst remains optimistic, forecasting a prolonged period of growth for the cryptocurrency market.
Cryptocurrency and Traditional Markets Witness Recovery Amidst Volatility
February 2, 2026, marked a day of significant recovery across financial markets. Following a period of intense selling pressure, particularly in the cryptocurrency sector, Monday's trading session brought a much-needed respite. Bitcoin, the flagship digital currency, successfully recouped some of its recent losses, which had seen its value plummet after what some termed the "Trump rally." The recovery was supported by a substantial 35% surge in trading volume. Ethereum also climbed, though it encountered considerable resistance around the $2,400 mark. Other prominent digital assets, including XRP and Dogecoin, similarly traded in positive territory. The broader cryptocurrency market capitalization demonstrated resilience, rising by 2.27% over a 24-hour period, reaching a total of $2.65 trillion. Interestingly, over $550 million in positions were liquidated from the market within the last day, with a majority being long positions. Despite this, the Crypto Fear & Greed Index indicated a prevailing sentiment of "Extreme Fear" among investors. Simultaneously, traditional markets also rallied. The Dow Jones Industrial Average advanced by 1.05%, closing at 49,407.66 points. The S&P 500 gained 0.54%, ending at 6,976.44, while the technology-heavy Nasdaq Composite saw a 0.56% increase, reaching 23,592.11. Precious metals, which had experienced sharp declines over the weekend, also rebounded. Spot gold climbed 3% to $4,789.09 per ounce, and spot silver surged 4.50% to $82.74 per ounce. This broad-based recovery suggests a renewed confidence among investors, perhaps signaling a turning point after recent market turbulence. Blockchain analytics firm CryptoQuant had previously identified "clear signs" of a Bitcoin bear market, noting that the percentage of Bitcoin supply held in loss had surpassed 44%. The firm suggested this pattern was more indicative of the early stages of a bear market than a typical mid-cycle dip. However, well-known cryptocurrency trader and analyst Michaël van de Poppe offered a contrasting perspective. He argued that Bitcoin's bull market typically doesn't reach its zenith when the U.S. Manufacturing Index falls below 50. Van de Poppe pointed out that the index's current position around the 50 level mirrored the beginning of the robust bull cycle observed between 2016 and 2017. Based on this historical correlation, he confidently projected a "strong bull market" that could extend for another one to two years.
This market activity highlights the intricate interplay between investor sentiment, technical indicators, and broader economic factors. While short-term volatility remains a constant in the cryptocurrency space, the long-term outlook, as suggested by some analysts, continues to be a driving force for many participants. The divergence in expert opinions also underscores the inherent unpredictability of these dynamic markets, urging investors to conduct thorough research and consider diverse perspectives.