Crypto Bear Market Dropping Without Strong Capital Inflow: Searching for the Bottom

The cryptocurrency market remains under intense pressure as we move into mid-February 2026. Bitcoin has continued its downward trajectory, currently trading around $65.57K—extending losses from earlier in the month when it touched $74,604 around February 2. Ethereum has similarly deteriorated to approximately $1.92K, while Solana has struggled to maintain any stable support above $100. This sustained dropping across major crypto assets reflects a broader market sentiment: the bear phase is here, and investors are bracing for potentially extended weakness ahead.

The consensus around the market has fundamentally shifted. There’s no longer debate about whether we’re in a bear market—the question now centers on where the bottom will form and how severe the downturn becomes. Industry analysts largely agree that capital inflow, which typically signals potential reversals, remains conspicuously absent from market structure.

The Current Pressures: Understanding Today’s Decline

Multiple factors are compounding the market’s dropping momentum. Tom Lee, a prominent crypto analyst, recently acknowledged on podcast that the cryptocurrency space faces significant short-term bearish pressure, suggesting Ethereum could potentially test $2,400 as a local bottom—a level already breached by current trading action.

Raoul Pal, co-founder and CEO of Real Vision, offers a compelling explanation for the prolonged weakness. He argues that during the recent market correction, centralized exchanges (CEX) were forced to absorb substantial asset volume, potentially around $10 billion in accumulated inventory. Rather than immediately liquidating this inventory, these platforms have been deploying sophisticated algorithmic selling strategies during U.S. stock market hours. Pal projects that this mandatory “digestion period” should conclude by late February, after which he anticipates Bitcoin could rebound sharply once selling pressure normalizes.

Expert Perspectives on the Bear Market Structure

The current bear market exhibits characteristics distinctly different from previous cycles. According to Benjamin Cowen, CEO of Into The Cryptoverse, the bull run spanning 2023-2025 has concluded, with 2026 positioning as a dedicated “digestion phase.” Cowen forecasts that Bitcoin will experience a gradual, slower decline rather than the violent 70-80% crashes seen historically. He attributes this moderation to the fact that the recent market top formed in a “lukewarm” environment of moderate euphoria rather than extreme irrational exuberance.

However, Cowen’s timeline is sobering: he expects bear market momentum to persist at least through mid-2026, with potential bottom formation not emerging until summer or Q3/Q4 2026. His primary targets converge around testing the 200-week moving average (200WMA), which presently ranges between $60,000 and $70,000.

Ki Young Ju, CEO of CryptoQuant, provides additional granularity on market mechanics. He emphasizes that sustained dropping reflects both ongoing selling pressure and the absence of substantial new capital entering the market. However, he offers an important caveat: unless Michael Saylor liquidates MicroStrategy’s holdings significantly, the market shouldn’t experience a catastrophic 70% decline like previous bear cycles. Instead, Ju suggests the current structure may form a broad, extended consolidation range rather than a sharp V-shaped reversal.

Market Psychology and Diverging Price Targets

Cathie Wood, founder of ARK Invest, has consistently hinted at eventual Bitcoin recovery, positioning Bitcoin alongside Ethereum, Solana, and even Hyperliquid as compelling diversification assets for long-term portfolios. She highlights an intriguing data point: the price correlation between Bitcoin and gold since early 2020 registers only 0.14—an extremely low coefficient that defies conventional portfolio theory assumptions. Notably, during Bitcoin’s previous two major bull cycles, gold price movements actually preceded Bitcoin strength.

Divergence appears in investor sentiment regarding bottom formation. Qiao Wang, Alliance co-founder, revealed on social media that he maintains psychological readiness for Bitcoin to decline toward $30,000-$40,000, though he doesn’t predict such levels. Should Bitcoin reach the $60,000-$70,000 range, Wang stated he would begin accumulating positions gradually. If levels do collapse to $30,000-$40,000, Wang commits to deploying capital aggressively.

The Unique Character of This Bear Market’s Dropping

What distinguishes the current bear market from historical cycles deserves emphasis. Rather than experiencing the extreme 70-80% drawdowns witnessed in previous downturns, this decline unfolds more gradually. This moderation stems from the fundamentally different formation of the recent top—emerging not from extreme euphoria but from moderate market conditions. As such, while 2026 remains classified as a bear market year, the expected depth and velocity of price discovery differs materially.

Market participants who believed they had established bottom positions—including well-known traders like Eugene Ng Ah Sio and Vida from Formula News—subsequently announced hedging activities and partial exits on February 1, signaling continued uncertainty despite earlier bottom-calling attempts.

The convergence of multiple expert viewpoints suggests searching for initial bottom-fishing opportunities within the $60,000-$70,000 band, where the 200-week moving average provides technical support. However, the extended timeline for bear market duration—potentially running deep into Q3 or Q4 2026—suggests patience remains essential for market participants navigating this prolonged period of dropping prices and subdued capital inflows.