The Bitcoin market is navigating a period of intense pressure, with short-term price action clashing with long-term valuation models. According to the long-running Bitcoin Rainbow Chart, a logarithmic growth curve valuation model, Bitcoin's current price near $75,900 sits close to the lower edge of the "Accumulate" band, which spans roughly $73,700 to $95,100. The model suggests a long-term fair value between $120,000 and $160,000 by late February 2026.
However, real-time sentiment from prediction markets paints a more immediate, sobering picture. On Polymarket, the February Bitcoin price contract shows traders have rapidly repriced expectations, with the $70,000 target surging to a 74% probability. The implied trading range for the month is now $65,000–$85,000, with upside expectations for $85,000 collapsing to just a 29% probability. The longer-term 2026 annual contract still shows a 55% probability for Bitcoin reaching $100,000, but this conviction has weakened significantly, down 29% from recent weeks.
The selloff driving this sentiment shift has been severe. Bitcoin briefly dipped below $72,000, hitting its lowest level in nearly 16 months and down roughly 40% from its October 2025 all-time high of $126,000. Technical damage includes over $5.4 billion in liquidations since late January, pushing open interest to a nine-month low. U.S. spot Bitcoin ETFs have seen consistent outflows, with total net assets falling from over $128 billion in mid-January to approximately $97 billion. The Crypto Fear and Greed Index has plunged to 12, indicating "Extreme Fear."
Broader macroeconomic factors are contributing to the pressure, including rising geopolitical tensions, lingering economic data gaps from a prior government shutdown, and a hawkish Federal Reserve chair nomination strengthening the U.S. dollar. This has triggered a rotation into traditional safe havens like gold, which has surged past $5,000 per ounce.
Despite the short-term turmoil, the Rainbow Chart framework maintains that Bitcoin is undervalued on a long horizon. The model identifies lower support bands, with the "BUY!" zone beginning near $54,700 and the "Basically a Fire Sale" area extending toward the low $40,000s. For now, the market's focus is squarely on whether Bitcoin can defend the $70,000 level as a critical near-term floor.
