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Bitcoin went through another pronounced phase of weakness, briefly falling to around $74,500 over the weekend before rebounding near $78,500. This move fits into a persistent negative trend, marked by a fourth consecutive monthly close in the red—a situation reminiscent of the most difficult moments of the 2018 bear market. Over the past month, the correction totals roughly 13%, confirming that selling pressure remains firmly in place.
This move can be explained by a particularly tense macroeconomic environment. Concerns surrounding potential new U.S. tariffs triggered a wave of massive liquidations across leveraged markets, resulting in more than $2.2 billion in forced positions unwound in just 24 hours. Contrary to usual expectations, even traditional safe havens failed to hold up: gold and silver suffered historic declines, illustrating a broad rush toward dollar liquidity rather than a risk-off move limited to crypto assets.
From a technical standpoint, the picture remains largely unfavorable despite a modest rebound. Moving averages continue to confirm a well-established downtrend, reinforced by trend indicators pointing to strong bearish conviction. The only more nuanced element is that certain oscillators now suggest bitcoin is in oversold territory, opening the door to short-term technical bounces without validating a true trend reversal.
Investor sentiment has also deteriorated sharply. The Fear & Greed Index has fallen into “extreme fear” territory. A move back above the $80,000 area would represent the first credible signal of easing downside pressure, even though overhead resistance levels remain numerous and difficult to overcome.
Despite bitcoin’s sharp drop below $75,000 over the weekend, U.S. institutional investor appetite has not faded. U.S.-listed spot bitcoin ETFs recorded net inflows of nearly $562 million in a single session—their largest since mid-January. This renewed buying suggests that many players took advantage of the recent dip to reposition, even as some feared a broader market panic.
Flows were primarily driven by major issuers, led by BlackRock and Fidelity, highlighting continued strong demand from Wall Street. This wave of inflows ended a roughly ten-day streak of continuous outflows, during which bitcoin fell from around $98,000 to below $75,000. Contrary to fears of a “Black Monday,” markets ultimately showed signs of stabilization.
A significant contrast nevertheless remains between bitcoin’s price and the positions held via ETFs. Although the current price is still about 40% below its October peak, U.S. ETFs hold close to 1.3 million bitcoins, only a modest decline from their record level. This suggests that, so far, investors have not materially reduced their exposure despite heightened volatility.
That said, these investors are now sitting on unrealized losses. The average ETF acquisition cost is around $84,000, well above current market prices. This gap represents a key test for demand resilience: if ETF holders capitulate under pressure, large redemptions could intensify the downtrend. Conversely, holding firm would confirm long-term conviction amid ongoing turbulence.
The recent bitcoin correction has reignited debate over the true nature of the move: is it merely a short-term episode driven by positioning and liquidity stress, or a more troubling signal for bitcoin’s status as a store of value? Most analysts agree the decline is primarily cyclical rather than structural. Opinions diverge, however, on bitcoin’s ability to once again attract capital in an environment defined by a strong dollar and persistent macroeconomic uncertainty.
Still, some positive elements are emerging. A significant portion of bitcoin’s supply is now sitting at unrealized losses, which could eventually reduce the intensity of forced selling. The market appears to have navigated this correction without major panic, leaving price action dependent on a potential revival in demand or supportive regulatory initiatives. In this sense, the “silver lining” does not stem from an immediate shift toward bitcoin as a safe haven, but rather from a market reset that could lay the groundwork for a new cycle if conditions align.
According to Matt Hougan, chief investment officer at Bitwise, the crypto market has been in a true “crypto winter” since early 2025, comparable to the major downturns of 2018 and 2022. Far from a temporary correction, this period has been marked by steep declines: bitcoin is down nearly 40% from its October 2025 peak, ether has lost more than half its value, and many other assets have fallen even further. For Hougan, acknowledging this reality is key to understanding why pessimism dominates despite some positive developments.
He believes, however, that the severity of the downturn was partially masked last year by institutional flows. Sustained buying through ETFs and digital-asset-focused corporate treasuries helped cushion the blow, particularly for large-cap assets. As a result, bitcoin, ether, and XRP held up better than tokens lacking institutional investment channels, some of which plunged by more than 60%. Without this massive support—over 740,000 bitcoins purchased during the period—the correction could have been significantly deeper.
Hougan emphasizes that, despite weak prices, the crypto ecosystem continues to make structural progress. Regulatory advances, institutional adoption, the growth of stablecoins, and real-world asset tokenization are laying solid foundations for the future. As in previous cycles, he notes that bear markets rarely end in excitement but rather in widespread exhaustion—a mood that closely resembles conditions near past market bottoms.
Finally, while the exact timing remains uncertain, Hougan believes the market is now closer to the end of the winter than its beginning. The unusually long duration of this phase, combined with solid economic growth, encouraging regulatory signals, and emerging sovereign interest in bitcoin, supports the idea that a turning point may be approaching. In short, the environment remains dark, but the conditions for a gradual recovery appear to be slowly taking shape.
Donald Trump’s nomination of Kevin Warsh to lead the Federal Reserve, replacing Jerome Powell, comes at a delicate moment for financial markets and cryptocurrencies. The announcement coincides with a sharp pullback in bitcoin and a reassessment of monetary policy expectations. Because digital assets are highly sensitive to liquidity conditions and interest rates, any change at the Fed is closely watched by the crypto market.
Kevin Warsh’s profile elicits mixed reactions. Known for his relatively firm stance on inflation and past criticism of accommodative monetary policies, he is viewed as potentially more hawkish than his predecessor. Such a posture could dampen risk appetite in the short term. Paradoxically, some argue that a tougher Fed could, over the longer term, strengthen bitcoin’s appeal as a counterweight to centralized and restrictive monetary policy.
Warsh’s views on cryptocurrencies are nuanced. While he has previously been highly critical of much of the crypto ecosystem and supportive of the idea of a central bank digital currency, he has expressed a more open stance toward bitcoin, which he sees as a distinct asset capable of playing a disciplinary role vis-à-vis policymakers. In summary, his nomination is neither a clearly bullish nor outright bearish signal for crypto, but it does add to a period of heightened political and monetary uncertainty.
Strategy, the company led by Michael Saylor, continued its bitcoin accumulation strategy by purchasing an additional 855 BTC for roughly $75 million at an average price near $88,000 per coin. Funded through the issuance of common stock, this move brings the company’s total holdings to more than 713,000 bitcoins, representing a significant share of the network’s maximum supply. Despite the scale of these positions, the recent market decline has sharply reduced Strategy’s unrealized gains.
As bitcoin fell below certain key levels, the company’s average acquisition cost briefly exceeded market value, putting its holdings into unrealized loss territory for the first time in over a year. This highlights the sensitivity of Strategy’s model to short-term price fluctuations, even though the company remains broadly near breakeven thanks to its long history of staggered purchases.
To finance these acquisitions, Strategy continues to rely primarily on the gradual sale of its publicly traded shares, with several billions of dollars still available for issuance. This dilutive approach is an integral part of its stated strategy of maximizing bitcoin exposure. Meanwhile, Strategy’s stock has become a favored indirect bitcoin exposure vehicle for some large institutional investors, notably Norway’s sovereign wealth fund, which concentrates most of its indirect bitcoin exposure through these shares.
This strategy, however, comes at a cost for shareholders. Strategy’s share price has fallen sharply from its highs, and the company’s market valuation is now below the value of the bitcoin it holds. Saylor maintains that the firm’s capital structure is designed to withstand a prolonged shock—even in the event of an extreme bitcoin drawdown—while acknowledging that investors would suffer significant losses in such a scenario.
According to analysts at Compass Point, the crypto bear market may have entered its final phase. While short-term risks remain skewed to the downside, they believe a much deeper bitcoin decline would require a major external shock, such as U.S. equities entering a full-fledged bear market. Absent such a scenario, the current correction appears more like an end-of-cycle process than the start of a new leg lower.
In their base-case scenario, bitcoin would establish a durable bottom between $60,000 and $68,000, with an anchor around $65,000. This zone corresponds to levels where long-term holders have historically shown strong accumulation behavior. A meaningful share of bitcoins held for more than six months was acquired within this range, reinforcing the idea of relatively solid support at those levels.
By contrast, the $70,000 to $80,000 range appears far more fragile. Analysts describe it as a true “air pocket,” characterized by a lack of structural support. Few long-term holders acquired bitcoin in this price band, leaving the market vulnerable to renewed selling pressure—especially as bitcoin ETF outflows remain elevated and many investors are currently sitting on unrealized losses.
Bitcoin has rebounded roughly 5% from its nine-month low near $74,500, reviving hopes of a recovery toward the $80,000 area or even $85,000. Following the sharp drop, buyers managed to defend the $78,000 level, which traders are now closely watching for signs of a short-term technical reversal.
From a charting perspective, several analysts emphasize the importance of “gaps” left behind during the rapid sell-off. These imbalances, created by abrupt price moves, often act as magnets during rebound phases. An initial zone lies around $79,000–$81,000, while a more strategic level sits between $84,000 and $88,000, corresponding to a large gap formed in futures markets. A sustained move above $80,000 could therefore trigger an acceleration higher.
Liquidity data point in the same direction. Order books show a heavy concentration of sell orders around $80,000 and just above $85,000. If price manages to clear these levels, forced short-covering could follow, amplifying the move and quickly pushing bitcoin toward the $85,000 area.
Finally, the return of positive flows into spot bitcoin ETFs reinforces the case for a technical rebound. After several days of outflows, early-month inflows suggest that some institutional investors are using heightened fear to re-enter positions. Combined with extremely pessimistic market sentiment—often observed near local bottoms—this capital inflow supports the idea that a relief rally could materialize in the short term, even if the broader trend remains fragile.
Ultimately, it is impossible not to step back and consider the long-term picture. Bitcoin has always exhibited high volatility, and the current price action is no exception. Historically, however, those who dared to buy when fear was at its peak have ultimately realized the largest gains. It is an approach that is certainly difficult to execute, but one that has proven rewarding over time.
The presented information is as of February 3rd, 2026, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
