The digital asset sector is experiencing a full-blown "crypto winter reminiscent of Leonardo DiCaprio in 'The Revenant'" rather than a temporary correction. However, according to Bitwise's Chief Investment Officer Matt Hougan, this current phase is closer to its end than its beginning.
— Matt Hougan (@Matt_Hougan) February 3, 2026
He estimates that this prolonged downturn began back in January 2025. However, significant inflows into ETFs and the activity of crypto treasuries, which purchased 744,000 BTC (around $75 billion) over the year, have masked the decline in Bitcoin. Without such support, the price of the leading cryptocurrency could have plummeted by 60%, according to the expert.
Digital gold has dropped approximately 39% from its all-time high of over $126,000 reached in October. Ethereum has fallen 53% from its peak, while many other cryptocurrencies have experienced even steeper declines.
Hougan compared the current period in the crypto market to the winters of 2018 and 2022, when positive news about mass adoption and regulatory advancements failed to shift investors' bearish sentiments.
"Why is the fear and greed index hovering around record fear levels when the new head of the Fed is a Bitcoin supporter? Because we are in a crypto winter," the expert wrote.
Signs of Cycle Completion
Hougan noted that crypto winters have historically lasted about 13 months from peak to trough and ended not with a surge of enthusiasm but with the exhaustion of sellers.
He believes the current mix of apathy and disappointment resembles conditions seen at previous market lows. Despite the overall weakness, the industry continues to evolve in key areas: regulation, stablecoins, and tokenization.
"Good news gets ignored in bear markets, but it doesn't disappear. It accumulates as potential energy. And when the clouds clear and sentiments normalize, this accumulated energy can return with a vengeance," the expert noted.
The CIO of Bitwise believes the market is closer to recovery than to another crash. He specifically pointed to positive economic growth, progress on the Clarity Act in the U.S., and signs of sovereign adoption of Bitcoin.
Positive Signals
According to Santiment, social media has been filled with "FUD" following Bitcoin's 16% drop since the end of January.
😠 FUD has taken over social media following Bitcoin's -16% since January 28th. After falling as low as $74.6K, $BTC has rebounded back up to $78.3K as a result of retail selling their bags. This is more proof that markets move the opposite direction of the crowd's narratives.… pic.twitter.com/NDffU98ZWM
— Santiment (@santimentfeed) February 2, 2026
The flow of negative publications continues to rise: pessimism among retail investors has reached its highest level since the correction in November. Analysts see this as a signal for an imminent recovery:
"In most cases, strong negativity like this is followed by a recovery bounce. So far, the current movement is encouragingly reminiscent of the two previous instances after waves of FUD."
Experts from Swissblock pointed to the growth metrics of the first cryptocurrency and liquidity, which are at their lowest levels since 2021. They noted that similar values preceded Bitcoin's rally to its all-time high back then.
The last time Network Growth & Liquidity hit these extreme levels was in 2021, right before BTC’s final push to a new ATH. We are starting to see a recovery in these metrics, signaling a potential final bullish episode.
— Swissblock (@swissblock__) February 2, 2026
While the divergence—rising metrics vs. falling… pic.twitter.com/vAHo8OOMZV
Currently, the numbers are beginning to rise, which "seems like a final signal before a potential breakout," the specialists emphasized.
"So far, we have a strange picture: network data is improving while the price is falling. This means investors are returning, but only to sell for now. The key question now is whether they will stay long enough this time for the market to gain strength?" — they wrote.
Continued growth in metrics could provide Bitcoin with the necessary momentum for a turnaround.
It’s worth noting that Galaxy Digital's head of research, Alex Thorn, predicted a potential drop of digital gold to $56,000.
Analyst Brett presented an even more pessimistic scenario, forecasting a drop in prices to $40,000 if the 2022 trend repeats itself.