Key Notes
- Hougan says strong institutional flows delayed recognition of the crypto winter that began in January 2025.
- He noted that the market may be closer to the end of this bear phase.
- Bitcoin dipped near $73,000 on February 3 before rebounding above $76,000.
Bitwise CIO Matt Hougan says the current crypto winter started far earlier than most market participants realized.
In a recent article on X, Hougan argued that the drop effectively started in January 2025, even though strong institutional flows hid the damage across much of the market.
Bitcoin BTC $76 148 24h volatility: 2.8% Market cap: $1.52 T Vol. 24h: $74.78 B is currently 40% down from its October 2025 peak of $126,080 while Ethereum ETH $2 262 24h volatility: 1.2% Market cap: $273.86 B Vol. 24h: $45.46 B has dropped 53%.
Crypto Fear and Greed Index has reached “extreme fear” levels, which places the market in winter conditions, explained Hougan.
The expert noted that price action over the past year followed two separate timelines.
Retail focused assets entered a bear phase early in 2025, but cryptocurrencies accessible to institutions stayed supported until much later.
Bitcoin and Ethereum benefited from ETF and Digital Asset Treasury inflows throughout the year and dropped around 10.3% to 19.9%.
Meanwhile, many altcoins plunged between 61.9% and 74.7% due to lack of institutional access.
Hougan noted that ETFs and related vehicles acquired about 744,417 BTC during this period, worth roughly $75 billion.
He argued that without this demand, Bitcoin could have traded closer to a 60% drawdown much earlier.
The Bitwise exec added that crypto winters tend to last around 13 months. He believes the market is likely closer to the end of the pullback than the start.
Bitcoin Volatility Continues
Bitcoin fell as low as $73,000 on February 3 before rebounding above $76,000 after a US funding bill passed, averting a government shutdown and easing near-term macro risk.
However, Santiment reported roughly $30 million in DeFi liquidations and suggested ongoing leverage cleanup.
Over the past week, Bitcoin has declined nearly 14%. The current price levels are below where Bitcoin traded during the Trump inauguration in January 2025.
It is near zones tested during the trade war announcement last April.
Wallets holding between 10 and 10,000 BTC have sold about 50,181 coins over the past two weeks.
At the same time, retail addresses have been buying the dips. Historically, this condition of large holder selling and retail buying has not supported sustained market growth.
While some analysts expect the bear phase to last another six to nine months, many note that regulatory clarity could limit drop compared with past cycles, where Bitcoin drawdowns reached 80%.
