Key Points
- The crypto market downturn began in early 2025, masked by sustained institutional inflows.
- Bitcoin and Ethereum were supported by ETFs, while retail-focused assets declined sharply.
Matt Hougan, chief investment officer at Bitwise, stated that the current crypto winter started earlier than widely recognized.
He explained that market weakness effectively began in January 2025, although institutional inflows softened visible losses.
According to Hougan, the market followed two distinct timelines during the past year.
Two-Speed Crypto Market in 2025
Retail-focused digital assets entered a bear phase early in 2025, while institutionally accessible cryptocurrencies remained supported until later in the year.
Bitcoin (BTC) is trading about 40% below its October 2025 peak, while Ethereum (ETH) has declined roughly 53% from its highs.
Hougan pointed to the Crypto Fear and Greed Index reaching extreme fear levels as confirmation of winter-like market conditions.
He noted that exchange-traded funds and related treasury products accumulated approximately 744,417 BTC, valued near $75 billion during this period.
Without this institutional demand, Bitcoin’s drawdown could have approached 60% much earlier, according to his assessment.
Hougan added that historical crypto winters typically last about 13 months, suggesting the current pullback may be more advanced than many assume.
Ongoing Bitcoin Volatility
Bitcoin briefly fell near $73,000 in early February before rebounding above $76,000 following the passage of a US funding bill that reduced short-term macroeconomic risk.
Despite the rebound, market data showed roughly $30 million in decentralized finance liquidations, indicating continued leverage unwinding.
Over the past week, Bitcoin has declined nearly 14% and is trading below levels seen in early 2025.
Wallets holding between 10 and 10,000 BTC have sold more than 50,000 coins over the past two weeks, while smaller retail addresses accumulated during dips.
Market observers note that similar patterns of large-holder selling alongside retail buying have historically not supported sustained upward momentum.
Some analysts expect the bearish phase to persist for several more months, though increased regulatory clarity may reduce downside risk compared with prior cycles.
