Bitcoin (BTC) begins the first week of February near its lowest range in 16 months, and the market is watching both the possibility of retesting the peak area of the 2021 bull market and the risk of further declines.

On Feb. 2 (local time), blockchain outlet Cointelegraph reported that traders cited technical indicators, derivatives-market price gaps, the macro environment and slowing U.S. demand as key variables that will shape bitcoin's moves this week.

On price action, bitcoin fell after weekend weakness to a level not seen since November 2024, adding to bearish pressure. Trader Roman said on X, formerly Twitter, that $76,000 is the last support line and that it could fall into the $50,000 range if it drops below that level.

Technical indicators are also flashing bearish signals. The weekly relative strength index (RSI) is around 32.2, near the oversold threshold of 30, and trader Mags noted that the reading is similar to levels seen at the end of the 2022 bear market. On-chain analytics firm Checkonchain also said the daily RSI near $76,000 is the most oversold since bitcoin was at $26,000 in 2022.

By contrast, the monthly stochastic RSI is cited as a caution factor. Crypto analyst Titan of Crypto said that when the monthly stochastic RSI settles below 20, it tends to confirm the start of a bear market, adding that time is needed to form a bottom.

In derivatives markets, a Chicago Mercantile Exchange (CME) bitcoin futures price gap is also being cited as a variable. With comments pointing to remaining gaps near $84,000 and $95,000, Andre Dragosch, head of research at asset manager Bitwise Europe, said the large CME gap suggests this drop could be a downside fakeout.

In the macro backdrop, a key question is how long the "risk-off" trend will last. U.S. corporate earnings are continuing this week, with results from Amazon and Google scheduled, while jobs data and public remarks by Federal Reserve officials are also awaited. There are also observations that uncertainty over a Fed chair replacement could weigh on markets. Jeff Mei, chief operating officer at BTSE, said an issue around Kevin Warsh and the selection of a Fed chair is affecting weakness in cryptocurrencies.

Rising volatility in traditional assets such as gold and silver is also cited as a burden on risk assets more broadly. Gold fell to $4,400 an ounce in Asian trading, its lowest level in the past month, and there are assessments that gold and silver prices have seen a sharp adjustment over a short period. With the possibility of a return of dollar strength also being mentioned, views persist that appetite for risk assets could weaken.

Signs of slowing U.S. spot demand are also cited as a checkpoint. On-chain analytics firm CryptoQuant assessed that a structural gap is emerging in U.S. spot demand. The Coinbase premium, the price difference between Coinbase BTC/USD and Binance BTC/USDT, has been staying in negative territory for longer, and it fell to -0.177 on Jan. 30, the lowest level in more than a year. CryptoQuant added that the discount not easing easily even after a price correction could suggest weakening buying power.

The market is viewing how bitcoin responds this week to key price levels and oversold indicators, derivatives-market gaps, macro events and changes in demand indicators as the key variables that will determine the near-term trend.