Bitcoin’s recent rebound proved short-lived as the cryptocurrency struggled to maintain momentum, highlighting the persistent volatility that has characterized its market. The digital asset was trading around $66,737 on Thursday, a significant retreat from its all-time high of over $126,000 achieved in October. The past month has seen an intensifying sell-off, pushing Bitcoin below the crucial $70,000 mark and briefly testing the $60,000 support level. While it managed to recover from those lows and hover above $70,000, sustained upward progress has been elusive, with prices largely confined to the $66,000 to $72,000 range. At present, Bitcoin remains approximately 47% below its record peak.
Several macroeconomic and technical factors are contributing to the current market sentiment. The broader tech stock landscape in the U.S. has experienced its own fluctuations, often creating a correlated downturn in crypto assets. The sharp sell-off on February 5th was largely attributed to a wave of liquidations, a phenomenon where traders are compelled to exit positions as prices hit certain thresholds, triggering a cascading effect that amplifies selling pressure. While these liquidation-driven events have somewhat subsided, their impact on market sentiment lingers.
Furthermore, investors are closely monitoring potential shifts in U.S. monetary policy. The nomination of Kevin Warsh for Federal Reserve chair, announced late last month, has injected a degree of uncertainty into the market’s outlook.
The introduction and subsequent trading activity of Bitcoin exchange-traded funds (ETFs) have also played a role. Initial outflows from these ETFs, driven by selling pressure from ETF issuers, added to the downward pressure on Bitcoin. However, recent data indicates a shift, with Bitcoin ETFs experiencing net inflows over the past three days, suggesting a potential stabilization or renewed investor interest.
The focus is now shifting back to Bitcoin’s historical cycles, particularly the patterns observed following its “halving” events. The halving, an intrinsic part of Bitcoin’s code that occurs roughly every four years, reduces the block rewards for miners, thereby slowing the rate at which new Bitcoins enter circulation. Historically, this supply constriction has often preceded significant rallies and new all-time highs, followed by a subsequent market correction before the next cycle of growth. The most recent halving took place in April 2024.
A debate is ongoing regarding whether Bitcoin’s established cycle is diverging from historical norms or if these patterns remain intact. However, many investors and analysts maintain that the cycle is still very much on track.
Steven McClurg, CEO of Canary Capital, expressed his perspective, stating, “2026 I expect to be a bear leg to the four-year cycle. We have experienced several four-year cycles since bitcoin has launched and this is no different than any other.” He anticipates Bitcoin could decline to around $50,000 by the summer before a potential turnaround in the fall. This sentiment echoes earlier analyses from Markus Thielen of 10X Research, who also suggested a potential fall to the $50,000 level for Bitcoin.
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