On February 6, 2026, Bitcoin rebounded 15% from just under $60,000 the day before to more than $71,000, recovering its market cap of $1.4 trillion after a sharp drop.
Liquidation Engine: Rebound Mechanism
On February 6, 2026, Bitcoin finally stopped the disastrous free fall that effectively nullified the “Trump bump”, erasing nearly all gains since the 2024 US presidential election. After briefly dipping below $60,000, the cryptocurrency made a massive 15% rally from its intraday lows to over $71,000. This reversal restored Bitcoin’s market capitalization to over $1.4 trillion, reinvigorating a market that was on the brink of a structural bear cycle.
This rebound was both emotional and mechanical, driven by a significant “short squeeze.” According to the data, more than $120 million of short positions were wiped out in an hour as Bitcoin’s price soared. For the second consecutive day, the total leveraged liquidation across the cryptocurrency market exceeded $1 billion.
read more: Is the bottom included? Bitcoin tests $65,253 as market panic takes hold
Reflecting the resilience of the cryptocurrency market, US stock indexes rebounded sharply as bargain hunters swooped in after a painful week. The Nasdaq Composite Index rose more than 400 points, or 1.86%, to 22,954, led by a recovery in major tech stocks, while the Dow Jones Industrial Average jumped 1,000 points, or 2%. The S&P 500 followed suit, rising 1.65% (112 points). However, at the time of writing, the Nasdaq was still down 1.65% in five trading days.
Some analysts have pointed to the U.S. State Department’s order for citizens to leave Iran as the trigger for Thursday’s panic, but the broader consensus suggests this is secondary to deeper structural issues. The Kobessi Letter experts point out that hedge funds sold individual US stocks at the fastest pace since October, arguing that the selloff was mainly caused by unloading by institutional investors.
Market watchers also cited the double whammy of weaker labor data and growing skepticism about large-scale artificial intelligence (AI) capital spending as key factors for the economic downturn.
However, sentiment changed decisively following Friday’s announcement of the US-Argentina Mutual Trade and Investment Agreement. This landmark agreement lowers long-standing trade barriers and provides unprecedented market access for U.S. auto and agricultural exports. Additionally, the agreement establishes a framework for critical minerals critical to high-tech and defense sectors, providing new tailwinds for U.S. industrial stocks and contributing to broader market stability.
Meanwhile, Matthew Siegel, head of digital asset research at Vanek, noted that the crypto carnage may have reached its mathematical limit, as technical indicators have reached historic lows. He added:
“On the Bitcoin futures continuation chart, momentum oscillators such as the RSI are below 21, an extreme oversold level that has historically preceded periods of stabilization and rescue rebound.”
Siegel emphasized that while many investors remain locked into a four-year cycle framework, recent price movements have been driven more by leverage dynamics and institutional positioning than cycle timing.
Frequently asked questions ❓
- What happened to Bitcoin on February 6, 2026? Bitcoin has rebounded 15% from its lows of around $60,000 to over $71,000, regaining a market cap of $1.4 trillion.
- What triggered the cryptocurrency rebound? A massive short squeeze wiped out $120 million in positions and caused more than $1 billion in liquidations across the market.
- How did US stocks react? The Nasdaq, Dow and S&P soared on the return of bargain hunters, but their weekly declines still continued.
- What has boosted global sentiment?
The U.S.-Argentina trade agreement has opened new markets for automobiles, agriculture, and critical minerals.
