Bitcoin is expected to begin its ascent in 2026, yet the shocking events of early February did not mark the asset’s final bottom. This was stated by Bitwise’s Chief Investment Officer Matt Hougan on the Blockspace podcast.
The expert referred to the plunge in the cryptocurrency’s price on February 6 to $60,000. The rate hit its lowest point since September 2024.
At the time of writing, the price had recovered to above $68,000 (CoinGecko). However, Hougan suggests that the asset’s correction is not over:
“One or two major shocks happen more often. I wouldn’t be surprised to see a similar event in the future.”
He disagreed with the view that the record liquidation on October 11, amounting to over $19 billion, marked the start of a bear market. According to Hougan, the crypto winter began in January 2025 following the inauguration of U.S. President Donald Trump. At that time, the sell-off began outside of Bitcoin and Ethereum.
Institutional investors were slow to react to the situation, leading to a $19 billion loss. This event confirmed the onset of the crypto winter, causing a decline in both leading digital assets.
Historically, Bitcoin’s price movements have occurred in four-year cycles, linked to halvings. After the block reward is halved, the asset’s price initially rises, then sometimes falls by 80-90%.
Hougan believes that with the influx of major players into the industry, the depth of such declines will reduce to 50-60%. He attributes this to the fact that institutional and retail traders operate in different cycles—when one group sells, the other may buy.
“This is the new reality we find ourselves in,” said Hougan.
Warning Signs for Bitcoin
Retail traders holding less than 0.01 BTC are aggressively buying cryptocurrency at every minor price drop. In contrast, institutional investors (10-10,000 BTC) have sold a “huge volume” of the asset over the past five weeks, as noted by Santiment.
Experts from the company described this divergence as “alarming.”
“Historically, sustained bull markets require accumulation by ‘smart money,’ not retail buying on dips,” they explained.
Santiment specialists pointed out another negative trend for Bitcoin—the volumes of on-chain transactions, the number of new addresses, and the network’s growth rate are steadily declining.
“Real market expansion should be supported by increased user activity, which is currently not observed,” the experts noted.
However, they highlighted positive signals:
- the number of extremely optimistic forecasts for Bitcoin’s price has decreased on social media, which is a “healthy market indicator”;
- the 30-day MVRV ratio for the leading cryptocurrency stood at -6, indicating a fairly high probability of a recovery rally.
No Quick Rebound Expected
Bitcoin rarely forms V-shaped bottoms outside periods of economic stimulus, such as during COVID-19. Typically, after reaching a bottom, the asset remains at that level for a considerable time. This was stated by macroeconomist Lyn Alden on the Coin Stories podcast.
“I think we are currently in a state of stagnation,” she noted.
During this “prolonged phase,” the price could drop by another $10,000-20,000, Alden admitted.
In her view, the catalyst for the next major rally in the leading cryptocurrency could be a peak in AI company stocks. When investors realize that the segment is no longer growing as rapidly as before, they will start looking for potentially profitable investments. Bitcoin could become one such asset. Moreover, for digital gold to resume growth, a large influx of capital is not necessary—just a slight increase in demand, Alden explained.
Hougan identified the DeFi sector as a potential driver capable of pulling the crypto market out of its prolonged correction.