Let me tell you what actually happened this month — not the panic version, not the permabull cope version, but what the data actually shows.
Bitcoin peaked near $90,000 earlier this year. It has since shed more than 20%, briefly testing $61,000 in early February before clawing back to the mid-$60,000s. The headlines are screaming. Retail is capitulating. Social media is full of people who bought the top announcing they’re “done with crypto forever.” And in the middle of all that noise, the most important signal in the market is getting completely ignored.
This is not the end of the bull run. But it is the part that separates the people who actually understand Bitcoin from the people who were just along for the ride.
The Month That Broke the Narrative
February 2026 delivered two gut punches in quick succession.
The first was the February 5th crash — one of the fastest single-day drops Bitcoin has ever recorded. VanEck analysts described it as a “statistical tail event.” Bitcoin fell so fast and so violently that the move itself was statistically extraordinary. When assets move like that, there are only two explanations: either something is fundamentally broken, or the market is violently flushing out leverage. The on-chain data pointed clearly at the second.
The second gut punch came just this morning. As I covered in detail in my piece on the Bitcoin $63K crash following US-Israel strikes on Iran, geopolitical shock compounded an already fragile market. $515 million in liquidations in a single hour. 152,275 traders wiped out. Bitcoin at its lowest level since the February 5th wick. The casual observer sees a collapsing market. The experienced Bitcoin observer sees a derivatives market getting cleaned out while long-term holder supply barely moves.
That distinction matters more than any price chart.
What the Bears Are Getting Right
I’m not going to pretend the situation is all sunshine. The bears have legitimate points and they deserve honest acknowledgment.
Bitcoin has broken below its 365-day moving average for the first time since March 2022. That is a real warning signal and it would be dishonest to wave it away. The institutional buying that powered the run to $90K has reversed — US spot Bitcoin ETFs that were absorbing 46,000 BTC per week at peak demand have flipped to net sellers in 2026, according to CryptoQuant. The macro backdrop is genuinely difficult: the Federal Reserve is holding rates near 3.75% with no clear catalyst for cuts, tariff escalation is injecting real uncertainty into global markets, and now a US-Iran military conflict has landed in the middle of everything.
If you told me six months ago that Bitcoin would be facing all of those headwinds simultaneously, I would have said that is a tough environment. It is. Acknowledging that is not bearish — it is honest.
What the Bears Are Getting Wrong
Here is where the analysis diverges from the doom narrative.
The selling has been mechanical, not ideological. During the February crash events, Bitcoin futures volume hit $68.27 billion against spot volume of just $7.02 billion. That ratio tells you everything. This is not long-term holders deciding Bitcoin is worthless and selling their stack. This is leveraged derivatives traders getting margin called and liquidated in cascading waves. The underlying asset — the 21 million coins, the network, the custody infrastructure, the institutional frameworks — none of that changed.
Long-term holder supply has barely moved. This is the on-chain metric I watch more closely than any other in periods like this. When genuine bear markets begin — when people who actually believe in Bitcoin start to lose faith — long-term holder supply drops sharply. It is not dropping sharply right now. The people who understand what they own are holding. The people getting wrecked are the ones who were playing with leverage they couldn’t afford to lose.
Exchange balances are not surging. In every major Bitcoin capitulation event, you see coins moving onto exchanges at scale as people prepare to sell. That pattern is not present at the magnitude you would expect if this were true capitulation. The panic is real. The structural selling is not — at least not yet.
ETF buyers are returning at lower prices. Following brutal outflows in late 2025, US spot ETFs recorded over $560 million in net inflows in a single day in early February. Institutions are not fleeing Bitcoin. They are repositioning — selling at the top and accumulating near the bottom, exactly as sophisticated capital behaves.
Why $65K Could Be the Floor
I won’t pretend anyone can call a bottom with certainty. Anyone who tells you they know exactly where this ends is selling something. But the evidence for $61,000–$65,000 as the base of this correction is stronger than most people acknowledge right now.
The velocity of the recent crashes is actually a bullish signal, counterintuitive as that sounds. When you look at the 15 fastest Bitcoin crashes on historical record, events of this speed — moves that happen in minutes rather than days — tend to mark the exhaustion of panic selling rather than the beginning of sustained decline. Slow grinding selloffs are more dangerous than violent spikes down. The violence of what happened on February 5th and again this morning suggests forced selling is burning itself out.
The distance Bitcoin has traveled from its long-term trend is extreme by any historical measure. When any asset becomes this statistically disconnected from its trend, mean reversion becomes increasingly probable. The rubber band does not stay stretched indefinitely.
And then there is the macro wildcard almost nobody is talking about. Private credit stress is building quietly in traditional finance. Blue Owl Capital’s $1.4 billion asset sale is drawing uncomfortable comparisons to Bear Stearns in 2007. If this signals the early stages of broader financial stress, the Federal Reserve’s eventual response will be what it always is: rate cuts and liquidity injection. Every time the Fed has done that since Bitcoin existed — 2009, 2020 — Bitcoin responded explosively to the upside. The short-term pain of geopolitical shock and rate pressure may be setting up one of the most powerful macro tailwinds Bitcoin has ever had.
The Path Back
For the bull cycle to resume, Bitcoin needs to do two things: stabilize above $68,000 and reclaim its 200-day moving average. That is the minimum requirement before any serious talk of new highs makes sense.
A sustained move above $92,000–$96,000 would be the first real confirmation that the correction is over and the next leg up is beginning. Above $100,000, the door opens to the $120,000–$130,000 targets that serious analysts have been modeling for 2026.
The worst-case scenario — a full macro breakdown driving Bitcoin into the $55,000–$57,000 zone — remains possible but increasingly unlikely given the structural buyers now present in this market. The US government holds 328,000 BTC and has pledged never to sell. Strategy and other publicly traded treasury companies hold 400,000+ BTC combined. These are not weak hands. These are holders who will not be shaken out by a derivatives liquidation cascade or a weekend geopolitical shock.
What This Moment Actually Is
I have covered multiple Bitcoin market cycles. I watched the 2018 collapse from $20K to $3K. I watched March 2020 when COVID cut Bitcoin in half in 48 hours. I watched the 2022 bear market that followed the Luna collapse and FTX implosion.
Every single one of those moments felt like the end. Every single one was followed, eventually, by new all-time highs. Not because Bitcoin is magic, but because the fundamental thesis — a fixed supply, decentralized, censorship-resistant monetary asset — does not get invalidated by a leveraged derivatives flush or a missile strike in the Middle East.
The bull run is not dead. It is on pause while the market does what it has always done: punish leverage, reward patience, and shake out everyone who was here for the wrong reasons.
The separation of money and state is still the most important financial idea of our generation. Bitcoin is still the hardest money ever created. The 21 million coin hard cap has not changed. None of the things that matter have changed.
Watch $62,800. Watch Monday’s market open. And if you are a long-term holder sitting in discomfort right now, remember that this is precisely the moment the asset was designed for.
Sources:
- VanEck Bitcoin Research, February 2026
- CryptoQuant — ETF Flow Data, February 2026
- CoinGlass — Liquidation Data, February 28, 2026
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile. Always do your own research before making any investment decisions.
