Bitcoin Meltdown
Posted on 2026-02-06 19:34
So, why is BTC dropping like a rock? The short answer is FUD -- fear, uncertainty,doubt. There is major geopolitical fear right now -- a US attack on Iran is quite imminent; if US gets bogged down, will China make a move for Taiwan? There's also some fear about de-dollarization, inflation, US debt, AI job killing, Democrats taking back the House, ... the list goes on and on. Lots of uncertainty.
All of this is echoed by the extreme volatility in the BTC markets. Take a peak at the graph of BTC Variance with respect to moving averages as shown on the cognotrend home page. The variance today is almost off the charts. The fear is real. The causes of the fear may not always be real.
If you Google "BTC Epstein", you will see that there is FUD surrounding some fake emails claiming that Epstein invented Bitcoin. This is just absolute nonsense.
There are long holders of BTC (10+) years, midterm holders (3-5 years) and short term holders (1-2 years). The latter class are those who are selling. They are late to the game, have little knowledge and understanding of the market dynamics, technical underpinnings and history of BTC. Plus, many of them may have bought BTC on margin at high rates. They are the ones who need to liquidate to pay off their creditors.
Some of the long holders may be selling, because they themselves are getting old. It's been 17 years since the blockchain began. People who accumulated in 2009-2010 might not want to wait for the next bull run to cash in their chips; they aren't going to be around much longer.
This too will pass. Keep dollar cost averaging.
All of this is echoed by the extreme volatility in the BTC markets. Take a peak at the graph of BTC Variance with respect to moving averages as shown on the cognotrend home page. The variance today is almost off the charts. The fear is real. The causes of the fear may not always be real.
If you Google "BTC Epstein", you will see that there is FUD surrounding some fake emails claiming that Epstein invented Bitcoin. This is just absolute nonsense.
There are long holders of BTC (10+) years, midterm holders (3-5 years) and short term holders (1-2 years). The latter class are those who are selling. They are late to the game, have little knowledge and understanding of the market dynamics, technical underpinnings and history of BTC. Plus, many of them may have bought BTC on margin at high rates. They are the ones who need to liquidate to pay off their creditors.
Some of the long holders may be selling, because they themselves are getting old. It's been 17 years since the blockchain began. People who accumulated in 2009-2010 might not want to wait for the next bull run to cash in their chips; they aren't going to be around much longer.
This too will pass. Keep dollar cost averaging.
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Comments
4 comments
Satoshi Nakamura said on 2026-02-06 20:04:
Broad Risk-Off Sentiment Across Markets
Bitcoin isn’t acting solo — it’s highly correlated with risk assets right now
Satoshi Nakamura said on 2026-02-06 20:06:
Sharp sell-offs in technology & AI stocks contributed to pressure on crypto.
Mike Carroll said on 2026-02-06 20:07:
Reply to Satoshi Nakamura:
Investors are reducing exposure to speculative assets in favor of safety (gold, bonds) — ironically even though BTC is sometimes marketed as “digital gold.”
Porky Pig said on 2026-02-06 20:09:
There's also rotation of capital (reallocation, not pure panic)
Some market analysts argue the crypto selloff reflects capital reallocation rather than pure capitulation — meaning profits/liquidity moving to other assets.