#GlobalTechSell-OffHitsRiskAssets

The global tech sell-off in early February 2026 has been brutal and fast-moving, hitting risk assets hard — especially crypto, which is acting like a leveraged version of Nasdaq growth stocks right now. Let's dive deeper into the details, building on the original breakdown with real-time context, exact numbers from recent sessions, and why this feels like a classic risk-off rotation.

The Tech Sector Carnage – Updated Numbers
The Nasdaq Composite has been the epicenter of the pain. From late January into early February:
It dropped sharply mid-week, closing around 22,540 on Feb 5 after falling ~1.6% that day (one of the worst sessions).

Multi-day declines reached 1.8–2.5% in several sessions, echoing the severity of past shocks like the April 2025 tariff event.
Year-to-date, tech-heavy indices (Nasdaq 100, semiconductors, software ETFs) are down 8–14%, with software and AI-exposed names taking the biggest hits.

Mega-caps tied to AI infrastructure and cloud have shed 18–30% from 2025 peaks, wiping out trillions in market cap overall.
The trigger? Mounting fears over AI disruption to traditional software models — think new AI tools (like from Anthropic) threatening SaaS incumbents — plus concerns about massive capex spending on AI infrastructure without immediate returns. This sparked a "software-mageddon" sell-off, with the S&P 500 software/services index losing nearly $1 trillion in value in a short window.

By Feb 6–7, we saw a sharp rebound: Nasdaq jumped ~2.2%, S&P 500 ~2%, and Dow even hit above 50,000 for the first time (up ~1,200 points in one session). This bounce came after heavy dip-buying, but the Nasdaq is still down ~1.8% for the week prior, showing fragility.

Why Tech Drives Everything (And Why Crypto Feels It Most)
Tech has been the key driver of global risk sentiment for years. When it rallies, everything high-beta follows (crypto, EVs, biotech). When it cracks, fear cascades:
Institutions are overweight tech/growth.
Retail sees AI/tech as "the future."
High-beta assets move in lockstep — Bitcoin's 30-day correlation with Nasdaq has been extremely high (often 0.75–0.90 in recent periods, though some data shows it dipping to ~0.25 over longer windows; in practice, the moves are synchronized during risk-off).

This rotation is textbook risk-off:
Money flees volatile assets → flows to gold (up sharply), Treasuries (yields collapsing), defensives, and cash.
No single black-swan event — just stretched valuations, leverage unwind, hawkish Fed repricing (fewer/slower cuts expected), negative Bitcoin ETF flows (~$800M–$1.3B outflows recently), stronger USD, and geopolitical noise colliding.

Bitcoin & Crypto – The Leveraged Pain Amplifier
Bitcoin's ride has been violent:
Peaked ~$126,000 in October 2025.
Plunged to lows around $60,000–$62,000 (drawdown ~52%).
Worst recent drop: 12–15% in a single session (Feb 5 was massive, largest one-day fall since 2022, briefly below $61,000).
As of early Feb 7, 2026: Hovering ~$69,900–$70,500 after a strong +10–12% rebound (from oversold levels, with some data showing closes around $69,919–$70,555).
Total crypto market cap lost $1.2–$2 trillion from 2025 peak (some reports say ~$2T wiped out since Oct).
Altcoins are crushed worse — many 65–85% off highs. Leverage fueled the cascade:
$1.8B–$3.2B in liquidations (mostly longs) over 48–72 hours.
Funding rates deeply negative → bearish dominance.

Self-reinforcing loop: Margin calls → forced selling → more calls → lower prices.
Volume exploded on downside candles (3–5x average) → panic capitulation.
Liquidity vanished below $70K → fast drops until buyers stepped in aggressively around $60K–$62K.

Bitcoin now trades like "leveraged tech" — high correlation means when AI/tech enthusiasm cools (as it has), BTC suffers outsized pain due to overlapping positioning.
Macro Fuel on the Fire
Fed hawkish shift: Markets pricing fewer cuts, higher-for-longer rates → hurts risk assets.
Spot BTC ETF flows negative.

Broader risk-off: Commodity swings, USD strength, geopolitical uncertainty.
Result: No catastrophe, just leverage + valuations + caution hitting at once.
Bottom Line & What Comes Next
This isn't a crypto-only crash — it's a global risk repricing led by tech, with crypto feeling it hardest because it's the most leveraged/sentiment-driven asset.

Historically, these extreme fear moments are prime contrarian zones for Bitcoin cycles:
Weak hands exit in panic.
Patient capital accumulates quietly.
Next bullish leg often starts at clear selling exhaustion.

The recent rebound (BTC back above $70K, stocks surging) shows dip-buyers stepping in, but it's fragile — needs sustained volume and conviction to confirm. Watch Nasdaq support levels, BTC holding $68K–$70K, and any Fed/ETF flow shifts.