Crypto’s Icy Embrace: When Winter Whispers of Spring

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In the vast and unforgiving expanse of the financial steppe, where the winds of speculation howl and the shadows of uncertainty loom, the sagacious Matt Hougan, CIO of Bitwise, has proclaimed that the crypto winter, that chilling season of despair, began not with the frost of December, but with the deceptive calm of January 2025. Ah, how the markets deceive us, cloaking their wounds in the silken robes of institutional flows, while beneath, the ice creeps ever deeper.

In a missive dispatched upon the platform of X, Hougan, with the precision of a Tolstoyan narrator, revealed that the decline commenced long before the masses awoke to its chill. Bitcoin, that proud stallion of the digital plains, now stands 40% below its October 2025 zenith of $126,080, while Ethereum, its noble companion, has fallen by a staggering 53%. The Crypto Fear and Greed Index, that barometer of the soul, has plunged into the depths of “extreme fear,” a state Hougan likens to the heart of winter itself.

Yet, in this tale of woe, there is a duality, a dance of two timelines. The retail-focused assets, those humble serfs of the market, entered their bear phase early, their spirits broken by the cold. But the institutional cryptocurrencies, the aristocrats of the realm, held their ground until the fourth quarter, their fortunes buoyed by ETFs and the treasures of the Digital Asset Treasury.

– Matt Hougan (@Matt_Hougan) February 3, 2026

Bitcoin and Ethereum, those twin pillars of the crypto empire, benefited from the inflows of ETFs, their declines limited to a mere 10.3% to 19.9%. Yet, the altcoins, those lesser nobles of the realm, suffered grievously, plunging between 61.9% and 74.7%, their fates sealed by their inaccessibility to the institutional elite. Hougan notes that ETFs and their kin acquired 744,417 BTC, a hoard valued at $75 billion. Without this demand, Bitcoin might have faced a 60% drawdown, a fate more dire than the one it endures.

The crypto winter, Hougan assures us, typically lasts 13 months, and he believes we are nearer its end than its beginning. Ah, the optimism of the wise, who see spring in the heart of winter!

Bitcoin’s Volatile Dance

On February 3, Bitcoin plummeted to $73,000, only to rebound above $76,000 after a U.S. funding bill averted a government shutdown, easing the macro risks that haunt the markets. Yet, Santiment reports $30 million in DeFi liquidations, a sign of ongoing leverage cleanup, a purging of excess in the face of uncertainty.

📊 Bitcoin’s drop to $72.8K immediately saw a decent bounce after clarity was provided by a passed bill, preventing a U.S. government shutdown. However, there were still $30M in DeFi liquidations. Our insight explores the volatility, and what’s next. 👇

– Santiment (@santimentfeed) February 4, 2026

Over the past week, Bitcoin has declined nearly 14%, its price now below the levels seen during the Trump inauguration in January 2025. It hovers near the zones tested during the trade war announcement of last April. Wallets holding between 10 and 10,000 BTC have sold 50,181 coins in the past two weeks, while retail addresses, ever hopeful, have been buying the dips. Yet, history tells us that this dynamic-large holders selling, retail buying-does not bode well for sustained growth, Santiment notes with a sigh.

Some analysts predict the bear phase will last another six to nine months, though regulatory clarity may limit the drop compared to past cycles, where Bitcoin drawdowns reached 80%. Ah, the irony of it all: in the world of crypto, even the winters have their seasons, and even the coldest nights whisper of spring.

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2026-02-04 13:21