Bitcoin finished its fourth consecutive week in the red and began the new week moving sideways. A weekend rebound reached $71,000 but quickly faded, before the coin dropped to around $67,000 on Monday. At the same time, Ethereum slipped to about $1,950. The market tests peaks cautiously, then retreats into hesitation, signalling mixed confidence in the asset's fundamentals.

Behind this volatility, a larger reality weighs on sentiment: Bitcoin is trading more than 40 percent below its all-time high near $127,000 in October, while the broader crypto market has lost nearly two trillion dollars in value since that peak. This isn’t a “small correction" but a broad re-pricing of an entire sector based on continuous momentum and easy recoveries—marking the start of a potential bear market.

When a rebound fails… don’t just look at the chart, look at the money
In crypto markets, trends are not made by slogans—they are made by cash flows. Since the selling wave accelerated in October, investors have pulled more than $8.4 billion from U.S.-listed spot Bitcoin funds. The exit of this institutional demand makes any rebound fragile. The market is losing its base of enthusiastic buyers who have generally absorbed dips.

Even when the market records large inflows, they tend to come as flashes, followed in quick succession by sell offs. For example, a strong inflow of about $760 million in a single day in mid-January—the largest since the October shock—did not turn into a long-term trend strong enough to change sentiment.

The result? Bitcoin is searching for buyers with conviction. And when conviction doesn’t appear, the market is set for forced liquidations.

Forced liquidations
A forced liquidation is not a voluntary sale. It occurs when a trader’s position is automatically closed by an exchange because the price drops to a level that wipes out the margin. The problem is that these closures rarely happen quietly—they often trigger a chain reaction: one sale pushes the price lower, which triggers more liquidations, creating a growing cascade.

Over the past four weeks, the market has offered stark numerical examples:

On January 29, liquidations in the crypto market surged to over $1.7 billion in 24 hours. On January 31, the market experienced a shocking $2.56 billion in liquidations, one of the largest waves since the October shock.

On February 5, Reuters reported that Bitcoin positions alone saw nearly $1 billion liquidated in 24 hours amid a sharp downturn.

These numbers don’t just represent losses on traders’ screens—they signal something more dangerous for the market as a whole: liquidity exits before the numbers do. After a large wave of liquidations, appetite for leverage declines, buy orders shrink and spread out, and the order book thins. Then even a moderate sale can move the price sharply, making volatility self-reinforcing.

This explains why the weekend rebounds failed so quickly: The market has a short memory for gains, but a long one for pain.

Bitcoin (Websites)

The bottom isn't a number... the bottom is a behavior

The question dominating this phase is not whether Bitcoin can rebound, but whether it is reaching a bottom that can be built upon. Here, traders are watching three behavioral levels more than purely technical ones.

First, the conditional panic zone near $60,000. A break below this level could open the door to a new wave of turbulence, as leveraged bets and options positions are clustered beneath it and could turn into fuel for further liquidations if momentum accelerates.

Second, a long term line of defense frequently mentioned by analysts: the 200 week moving average near $58,239. It is seen as the dividing line between a downturn that can be contained and one that reshapes the entire cycle.

Third, a recurring psychological and price resistance wall: the area around $69,000, followed by the $73,000 to $75,000 range. The idea is simple. Any sustainable uptrend requires stable closes above these levels, otherwise any rise remains just a rebound within a broader decline.

Trump's legislation seeks clarity

Despite the pressure, market behavior cannot be separated from a factor that resurfaces whenever declines intensify: the regulatory and legislative file in the United States. There is cautious optimism that a clear legal framework for digital assets could redefine risk, shifting the narrative from platform chaos to a measurable, structured industry. That shift could open the door to deeper institutional participation and more stable liquidity.

The problem is that this optimism continues to clash with a complicated reality. Legislative paths remain slow, political disagreements delay decisions, and regulatory agencies differ over who has ultimate authority. This leaves the market suspended between the promise of legitimacy and the cost of waiting. In that vacuum, every rumor of progress sparks a brief buying wave, and every sign of delay triggers renewed caution. Regulation has effectively become part of the pricing equation rather than merely its backdrop.

What could restore the trend? Flows… then confidence

In the background, institutional expectations are also shifting. Standard Chartered has lowered its end 2026 target to $100,000 from $150,000, warning of the possibility of a deeper decline before recovery. The impact of such revisions is not measured by whether they ultimately prove correct, but by their immediate psychological effect. When the market hears $50,000, it behaves more cautiously at every rebound.

Still, the outlook is not locked into one direction. The digital asset market has repeatedly proven its ability to shift sentiment quickly, even after severe downturns, when flows from institutions and large holders change course. That makes next month’s benchmark clear.

Bitcoin today does not lack movement. It lacks conviction and the confidence that broke in October. In a market driven by leverage, conviction does not come from words. It comes from two numbers only: institutional inflows returning, and liquidations easing or a credible wave of regulatory optimism. Only then does a trend begin to emerge as reality rather than hope.

Head of Research and Market Analysis at Equity Group.