The past few months in crypto have felt less like panic and more like exhaustion.
Bitcoin lost nearly half its value from the October 2025 peak near $125,000 to the low $60,000s as of early February.
Talks about fundamentals, hype, fatigue, and fear are circulating. But the tone inside the market has been oddly restrained.
That contrast is the starting point for understanding what has really been going on, and what’s next.
The macro backdrop that changed the rules
Crypto entered late 2025 priced for a friendly macro environment.
Rate cuts were expected, liquidity conditions were assumed to improve, and risk appetite was strong across equities and digital assets.
But the turn of the year changed everything. US inflation proved sticky, the Federal Reserve signalled patience rather than urgency, and real yields remained elevated.
Risk-free assets once again offered returns that directly competed with speculative investments.
Bitcoin, by this point, was no longer trading in a niche corner of markets.
It had become part of the same macro basket as high-growth equities and other risk assets.
When expectations for easier financial conditions were pushed out, prices adjusted accordingly.
This adjustment was not unique to cryptocurrency, but it felt more acutely in the crypto space due to its volatility and positioning.
When the marginal buyer stepped away
One of the most important changes of the past two years has been the rise of spot Bitcoin ETFs.
Throughout 2024 and much of 2025, these products provided a steady bid, drawing in institutional capital that had previously stayed on the sidelines.
That flow mattered because it was incremental and persistent.
In January 2026, that dynamic reversed. Public data from ETF issuers showed meaningful net outflows over several weeks.
This did not reflect a sudden loss of faith in Bitcoin’s long-term prospects, but more of a portfolio behaviour.
Institutions rebalance, reduce exposure when volatility rises, and respond to macro signals.
Once that steady source of demand faded, the market had to find a new clearing price.
At the same time, exchange data showed a rise in Bitcoin moving onto trading venues, a pattern often associated with near-term selling.
The combination of weaker inflows and rising available supply created downward pressure without the need for dramatic headlines.
The speed of the move was amplified by leverage. By the end of 2025, futures open interest and options positioning were elevated, with many traders positioned for continued upside.
As prices began to slip, liquidations followed. Forced selling pushed prices lower, which triggered more liquidations of up to $1.7 billion.
This process explains why moves in crypto often feel abrupt. The underlying change was gradual, tied to macro conditions and flows, but derivatives markets compressed that adjustment into days rather than months.
Once leverage was cleared, volatility eased, and prices began to move sideways rather than straight down.
Who actually sold and who did not
A common mistake during drawdowns is to assume that everyone is reacting the same way, but chain data suggests otherwise.
Coins that moved during the selloff were disproportionately those acquired in the previous year.
These were investors who entered during the post election rally, drawn in by momentum, policy optimism, and rising prices.
Longer-term holders behaved differently. Supply held for several years barely budged.
Many early adopters and long-term believers neither bought nor sold. They were unfazed, but also inactive.
This means that selling pressure came from the margins of the market, not its core.
This pattern also explains why prices could fall sharply without turning into a disorderly collapse.
The base of ownership remained stable, even as newer participants exited.
Fatigue replaced enthusiasm
Earlier crypto cycles were defined by rapid rebounds. Dips were bought aggressively, narratives regenerated quickly, and prices recovered faster than expected.
This time has felt different. The absence of panic has been matched by an absence of excitement.
Long-term holders, confident in their thesis, did not rush to add more exposure. Newer investors, having absorbed losses, became cautious.
The result has been thin demand rather than heavy selling. Markets in this state tend to drift and frustrate rather than crash and recover.
This fatigue also helps explain why familiar stories failed to revive prices. Bitcoin did not behave like digital gold during the recent global uncertainty.
Capital flowed into actual gold instead, which reached new highs while Bitcoin struggled.
Political support and favourable rhetoric also proved temporary. The post-election premium unwound once expectations ran ahead of delivery.
What the data suggests about what comes next
Looking ahead, the most useful signals are not narratives but constraints, with the first one being liquidity.
As long as real rates remain elevated and central banks signal caution rather than urgency, crypto is unlikely to regain the reflexive upside it enjoyed in earlier easing cycles.
Historically, sustained Bitcoin recoveries have coincided with expanding balance sheets or falling real yields. Neither condition is clearly in place today.
Flows offer a second guide. ETF data has become a weekly referendum on institutional appetite.
Stabilisation matters more than outright inflows. Periods where outflows slow, and assets under management flatten, have often preceded price bases.
A renewed bid would change the picture, but episodic buying alone has not been enough to reverse broader trends.
Positioning also looks healthier than it did three months ago. Futures open interest is lower, funding rates are less one-sided, and options markets show reduced demand for aggressive upside exposure.
That reduces the risk of another sharp liquidation-driven leg down, although it also limits the speed of any upside move. Markets that clear leverage tend to trade slower and with less drama.
On the supply side, long-term holder behaviour remains the quiet constant. Coins held for several years continue to move very little, even at current prices.
That has historically placed a soft floor under the market, although floors can stretch sideways for long periods. What is missing is not belief, but urgency.
The implication is a market more likely to compress than trend. Range-bound trading, rotation between Bitcoin and large-cap tokens, and sensitivity to macro data releases are more plausible than a rapid return to highs or a sudden collapse.
In past cycles, this phase has ended only when an external variable changed decisively, either monetary conditions or a new source of sustained demand.
For now, crypto is behaving less like a frontier asset and more like a maturing one.
Prices respond to rates, flows, and positioning rather than slogans. That does not make the asset weaker. It makes it more legible.
The post The anatomy of Bitcoin’s crash: macro, money and missing urgency appeared first on Invezz
