BEARISH 📉 : Crypto Winter Started January 2025 as Bitcoin Drops 40%

Bitwise CIO Matt Hougan highlights that the crypto winter began earlier than perceived, starting in January 2025. Despite strong institutional flows masking initial impacts, Bitcoin is down 40% from its peak of $126,080, and Ethereum has dropped 53%.

The Crypto Fear and Greed Index indicates "extreme fear," suggesting harsh market conditions.
Retail-focused assets entered a bear phase early in 2025, while institutional-accessible cryptocurrencies remained supported until later.

Bitcoin and Ethereum saw ETF and Digital Asset Treasury inflows, with drops around 10.3% to 19.9%. Altcoins fell between 61.9% and 74.7%, lacking institutional access. ETFs and related vehicles acquired about 744,417 BTC, worth roughly $75 billion, stabilizing Bitcoin's price.

Hougan believes crypto winters last about 13 months, suggesting the market may be nearing the end of the downturn.

Bitcoin Volatility Continues

On February 3, Bitcoin fell to $73,000 before rebounding above $76,000 following a US funding bill passage. Santiment reported $30 million in DeFi liquidations, indicating ongoing market volatility.

Bitcoin has declined nearly 14% over the past week, trading lower than levels seen at the Trump inauguration in January 2025.
Wallets holding between 10 and 10,000 BTC have sold about 50,181 coins recently, while retail investors are buying the dips.
Analysts expect the bear phase to continue for six to nine months, though regulatory clarity might reduce potential declines compared to past cycles.