A recent analysis by Bitwise Chief Investment Officer Matt Hougan characterizes the current market as a genuine crypto winter, yet he also posits that it may represent the final shakeout before the onset of a new cycle. This sentiment echoes the harsh market conditions observed during the winters of 2018 and 2022. The downturn, which began in January 2025, has been exacerbated by substantial inflows into exchange-traded funds (ETFs), masking the true extent of the market”s struggles.
Currently, Bitcoin has declined approximately 39% from its peak, while Ethereum has suffered a drop exceeding 50%. Hougan suggests that the market could be forming what is referred to as a “rounding bottom,” an indicator that despair among traders might signal a pivotal turning point. Looking ahead, he does not view 2026 as a continuation of a bear market, but rather as the beginning of a new cycle driven by institutional investments.
Hougan anticipates that Bitcoin will stabilize between $75,000 and $100,000 in the initial half of 2026, potentially breaching its previous all-time high in the latter part of the year. This forecast is attributed to anticipated institutional inflows, declining interest rates, and reduced market volatility, which are all expected to replace the traditional four-year market cycles.
When assessing whether Bitcoin is experiencing a correction or a full bear market, Hougan points to liquidity and support levels. He emphasizes that while Bitcoin is indeed in a crypto winter, the behavior of liquidity indicates that we may be in a late-cycle phase rather than on the brink of a prolonged downturn. He notes that the downturn commenced earlier in 2025, despite the peak occurring later, with institutional inflows concealing the severity of losses.
Over the past five days, the market has witnessed significant price drops, with Bitcoin falling by 13%, currently around $77,800, and Ethereum dropping 24% to approximately $2,293. The total cryptocurrency market has lost about $1.7 trillion, translating to a 39% decline from its previous high.
One critical support level is identified at $60,000, which separates a significant correction from a confirmed bear market. Maintaining this threshold is vital for preserving a higher-low structure; any breach below it could confirm a trend failure. The dynamics surrounding spot Bitcoin ETFs have become increasingly important as they act as a liquidity buffer and a critical metric for understanding market conditions. As of February 3, 2026, the total assets under management for spot Bitcoin ETFs reached approximately $113.17 billion.
Looking to the future, three scenarios outline Bitcoin”s trajectory through 2026. Bullish conditions could see prices soar between $150,000 and $200,000 if the Federal Reserve aggressively cuts rates and sovereign reserves adopt Bitcoin. Base conditions suggest a range of $70,000 to $110,000 with steady ETF inflows, while bearish conditions may push Bitcoin”s price down to between $45,000 and $60,000 amid potential recessions and regulatory tightening.
In summary, while the current landscape may appear bleak, analysts like Matt Hougan are optimistic about the potential for recovery, driven by institutional interest and evolving market dynamics.
