Santiment: Public Fear Causes Bitcoin Bounce, $70K Rally in Focus

Santiment says extreme fear following Bitcoin’s $60,000 drop has contributed to a recovery, with potential momentum towards $70,000.

Bitcoin (BTC) fell to around $60,000 earlier today before recovering towards $65,000 after one of the sharpest daily sell-offs in its history.

The move has divided traders between those who call the rebound a temporary technical reaction and others who point to extreme fear in preparation for a recovery towards $70,000.

Fears are rising as Bitcoin recovers from a sell-off

On February 6, Santiment noted that social media reports calling for Bitcoin to go “lower” or “below” skyrocketed after the drop to $60,000, a pattern that the analytics firm says often occurs near short-term price upswings.

Indeed, the asset bounced back to around $65,000, with the increase following what The Kobeissi Letter described as BTC’s first-ever daily drop over $10,000, alongside claims that a large leveraged position had been liquidated.

“Is this nothing but a dead cat bouncing?” Santiment wondered, positing that there may have been enough retail shake-up to warrant a quick rally to the $70,000s.

The sell-off ended weeks of heavy downward pressure, as CryptoPotato previously reported, with Bitcoin erasing gains from Donald Trump’s re-election and dragging down most major altcoins. XRP fell 13% that day, while Ethereum, Solana and BNB also posted steep losses.

Meanwhile, on-chain and derivatives data paint a mixed picture among the recovery. According to DeFi commentator Marvelous, this is ‘smart money’ taken a net short position, while whales and public figures take long positions. The market watcher argued that the move looked more like a mechanical reaction after $2.2 billion in long liquidations than a renewed conviction, noting that open interest remained high and financing rates had remained flat.

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Elsewhere trader Sykodelic marked a lopsided liquidation chart, claiming that the market had cleared out most of the long positions, leaving about $29 billion in shorts over a year, versus about $100 million in longs.

Price action shows heavy damage despite short-term bounce

Bitcoin was trading around the $65,000 level at the time of writing, down nearly 9% in the past 24 hours and more than 21% in the past seven days. In the previous month, losses were almost 30%, leaving BTC about 48% below its October 2025 peak, when it crossed the $126,000 mark.

CryptoQuant analysts have said the current downturn is developing faster than the 2022 bear market, with their data showing the OG cryptocurrency falling 23% within 83 days of losing the 365-day moving average, compared to a 6% decline in the same period in early 2022.

Santiment added that sentiment toward both Bitcoin and Ethereum (ETH) had turned “extremely bearish,” a condition that could coincide with short-lived relief rallies as retail fears remain high.

For now, traders remain divided. Some see the concentration of short positions and fearful sentiment as fuel for a move back towards $70,000, while others have warned that without a collapse in open interest and prolonged sideways trading, the recent rebound could merely be the harbinger of another test at lower levels.