Bitcoin is currently experiencing a significant downturn that appears more severe than the crash seen in 2022. Data released by CryptoQuant on Wednesday revealed that the leading cryptocurrency has plummeted 23% over a span of 83 days since November, contrasting sharply with the mere 6% loss during the same timeframe in 2022. According to CryptoQuant, “momentum is deteriorating faster this cycle.”
The numbers are unsettling: Bitcoin reached a peak of $126,000 in October, only to be met with a brutal liquidation event on October 10 that saw its price plunge to $71,000. The Bull Score Index, which was previously at 80, has now dropped to zero, indicating significant structural weakness that traders are acutely aware of. Analysts are now targeting a support range between $60,000 and $70,000 as the next critical level.
Another concerning factor is the “Traders” On-chain Realized Price,” which has become a formidable barrier for Bitcoin. This price level, which typically provides support during bull runs, has recently rejected prices on three separate occasions, leading to further downward pressure on the market. CryptoQuant reiterated this sentiment, stating that “Bitcoin”s bear market is off to a weaker start than 2022.”
Sentiment around Bitcoin and Ethereum has turned extremely bearish, with Santiment reporting that the sentiment metrics have hit alarming lows. Interestingly, when smaller traders exhibit such negative sentiment, it can occasionally lead to short-term price recoveries, as contrarian strategies often benefit from unexpected market movements.
Glassnode has also weighed in, stating, “The BTC bear market rages on as profitability resets, realized losses rise, spot demand stays weak, and leverage unwinds.” The Fear and Greed Index has plummeted to around 12, marking an all-time low, indicative of widespread panic selling across the market. The total cryptocurrency market capitalization has also taken a hit, declining 4.4% to $2.53 trillion—its lowest level since April 2025.
During Thursday”s Asian trading session, Bitcoin fell below $71,000, setting the stage for a potential test of the $65,000 support level. Meanwhile, Ethereum continues to struggle, failing to reclaim levels above $2,100, which aligns with the lows seen in previous cycles, creating further anxiety for its holders.
Altcoins have faced even graver losses, with many dropping 80% from their all-time highs, making Bitcoin“s decline seem relatively mild in comparison. Market participants find themselves in a state of uncertainty, with fears of revisiting the bear market lows from 2024 not dismissed.
The volatility is impacting other major digital assets as well. CryptoQuant has emphasized the significance of the Traders” On-chain Realized Price, noting that repeated rejections signal a profound shift in market dynamics, disallowing traders from pushing prices higher at this moment. February is shaping up to be a decisive month for Bitcoin“s price trajectory.
Furthermore, CryptoQuant”s data from February 5 indicates a decline in Bitcoin network activity, with active addresses falling, suggesting a waning interest or confidence among users. A drop in user engagement typically foreshadows further price challenges.
On February 4, Glassnode reported that Bitcoin“s realized losses have surged to new highs, highlighting the increasing number of coins being sold at a loss. Traders who entered the market at higher price points are feeling the financial strain, leading to forced liquidations as prices continue to decline.
Brian Quinlivan from Santiment has expressed concern over the potential for more volatility, noting that the extremely negative sentiment among retail investors could result in unpredictable price fluctuations. The trading volume for Bitcoin spiked on February 5 as traders reacted to the price drop, indicating heightened activity as investors either capitulate or attempt to buy the dip.
The current state of the crypto market poses significant challenges, with many altcoins witnessing catastrophic declines, underscoring the extreme risks and instability that investors are facing. As traders reevaluate their positions, the grip of the bear market tightens across the cryptocurrency landscape.
With Bitcoin“s network fundamentals weakening, declining user engagement, rising realized losses, and breaking support levels, the $65,000 mark is becoming a focal point. However, there is no assurance that it will hold if selling pressure continues unabated.
The institutional landscape adds complexity to Bitcoin“s current challenges. MicroStrategy, which holds over 190,000 Bitcoin valued at approximately $13.5 billion at current prices, faces mounting pressure as its stock price closely tracks Bitcoin“s movements. What was once a celebrated strategy of aggressive Bitcoin accumulation now appears increasingly precarious as unrealized losses accumulate.
Moreover, newly launched spot Bitcoin ETFs have recorded significant outflows, with BlackRock”s IBIT and Fidelity”s FBTC experiencing net redemptions for five consecutive trading days. Regulatory uncertainties are amplifying the selling pressure across major markets, with the SEC”s ongoing scrutiny of cryptocurrency operations unsettling institutional investors. Proposed legislative measures could further complicate crypto trading, while China”s renewed crackdown on Bitcoin mining operations has disrupted network hash rates, contributing to the fundamental weaknesses identified by CryptoQuant.
In Europe, stricter compliance requirements under MiCA regulations are forcing some exchanges to limit their services, adding another layer of friction for traders navigating the current downturn.
