According to Coinglass data, Bitcoin has fallen for four consecutive months since it closed down in October last year, falling from a historical high of US$126,000 to the current US$76,500, with the largest cumulative decline during the period reaching 39.3%. Historically, only the Bitcoin declines from July to October 2014 and August 2018 to January 2019 can be compared with this decline. ETH has fallen for 5 consecutive months, and similar long-term decline ranges in history are from December 2024 to April 2025, and from May to November 2018.

This round of plummeting began on January 30: After the current decline of BTC, the decline continued to expand. As of press time, BTC has fallen below the US$80,000 mark and is barely hovering above the US$75,000 mark. As of press time, BTC was trading at US$76,872.42, down 12.6% on the 7th; ETH was trading at US$2,238.28, down 21.7% on the 7th.

Other crypto assets also continued to fall: BNB reported at US$732.26, down 15.9% on the 7th; XRP reported at US$1.54, down 17.7% on the 7th; SOL reported at US$96.9, down 20.5% on the 7th.

What factors caused the crypto market to fall so sharply? How do industry insiders view future market conditions? As the largest Bitcoin and Ethereum treasury companies, can Strategy and Bitmine still hold up under the current market conditions?

1. Reasons for the sharp decline in the encryption market

1. Wash Panic

On January 30, 2026, Trump announced on Truth that Kevin Warsh would serve as Chairman of the Federal Reserve and said that Warsh would never disappoint. Warsh is likely to hold a hawkish stance after taking office, which heralds the Fed's shift to monetaristism, tightening monetary policy and re-emphasis on price stability. Therefore, market analysts believe that the shrinking size of the Federal Reserve’s balance sheet and rising interest rates may limit liquidity in the cryptocurrency market, which relies on ample U.S. dollar liquidity. In addition, Warsh’s advocacy for a central bank digital currency (CBDC) may challenge Bitcoin’s decentralization principles, thereby creating regulatory headwinds for Bitcoin.

Controversy over the 2.1011 crash

The market generally believes that the impact of the 1011 crash is still continuing to ferment more than three months later, and will eventually lead to this round of plunge in the crypto market.

• On January 31, Former Binance CEO Changpeng Zhao (CZ) refuted accusations that Binance was involved in the largest liquidation event in cryptocurrency history, when approximately $19 billion in positions were liquidated in the cryptocurrency market. Changpeng Zhao called the suggestion that Binance was responsible for the crash “far-fetched.” "There is also a large group of people who claim that the crash on October 10 was caused by Binance, and they demand that Binance compensate for all losses."

• During the 1011 crash, the price of USDe on the Binance exchange fell from $1 to about $0.65, an incident that was later attributed to problems with the platform’s internal oracle. Guy Young, founder of Ethena Labs once pointed out: Price dislocation is limited to one trading venue. "The severe price spread was limited to one trading venue, which referenced the oracle index in its own order book rather than the most liquid trading pool. Additionally, the exchange experienced deposit and withdrawal issues during the incident, which prevented market makers from completing arbitrage trades."

• Tom Lee, chairman of BitMine’s board of directors, said that the current bear market was triggered by the largest deleveraging event in crypto history in October last year (bigger than the FTX crash): a trading platform’s pricing vulnerability triggered a chain of automatic liquidations. More than 2 million accounts around the world were liquidated, 1/3 of the market makers were destroyed, and the trading platform’s balance sheet was severely damaged, causing the entire ecosystem to “limb”. Tom Lee also said that the selling pressure has not completely ended, similar to the recovery in 2022, which will take 8-12 weeks, but there is no obvious rebound signal yet.

• ARK Invest CEO Cathie Wood pointed out: Bitcoin's recent pullback is the result of a deleveraging event triggered by a Binance software glitch on October 10 last year.

• Real Vision co-founder and CEO Raoul Pal said that according to the global liquidity model, the Bitcoin price should have been around $140,000, but the 1011 incident caused the cryptocurrency to lag behind the stock market and gold. He reviewed and believed that Trump’s tariff policy triggered a major macro shock that day, and highly leveraged positions were collectively liquidated. The Binance API was briefly interrupted, making it impossible for market makers to place orders normally, and the leading CEX was forced to use its balance sheet to take over the market to prevent a system collapse. Raoul predicts that CEX may absorb US$10 billion in assets and use algorithms to sell inventories intensively during the opening hours of U.S. stocks, leading to long-term market weakness.

• Dragonfly managing partner Haseeb posted on the 2. The scope of the event is limited: USDe’s price only deviated on Binance, but the liquidation wave spread across major exchanges, indicating that USDe was not transmitted across markets and it is impossible to explain global liquidation. In fact, the more likely cause of the 1011 crash was the superposition of systemic factors, including: 1. Trump’s tariff news that night triggered market panic, leading to a sudden increase in trading volume; 2. The Binance API was temporarily interrupted, preventing market makers from balancing positions across exchanges, triggering large-scale liquidations; 3. The automatic deleveraging (ADL) mechanism was triggered, breaking risk hedging and amplifying losses; 4. The self-stabilizing mechanism (such as circuit breaker) in traditional finance is missing in the crypto market, making it difficult for retail investors to intervene in a timely manner. Therefore, the "1011 crash" is the combined result of path-dependent events and market structural flaws, rather than the responsibility of a single platform or product. The market can still recover in the long term, but retail investors and market makers suffer serious short-term losses.

3. Insufficient liquidity

• BitMEX co-founder Arthur Hayes noted that USD liquidity has fallen by approximately $300 billion in recent weeks, primarily due to increases in the Treasury General Account (TGA). He believes that governments may be increasing cash balances in response to possible spending disruptions, and that Bitcoin's decline is consistent with a tightening of the U.S. dollar.

• Raoul Pal, founder and CEO of Global Macro Investors believes that the major market rout in crypto assets is due to a lack of liquidity in the United States, rather than a problem with cryptocurrencies themselves. Pal pointed out: "The current mainstream view is that Bitcoin and cryptocurrencies have collapsed and the cycle is over. But this is unlikely because software-as-a-service (SaaS) stocks have also fallen simultaneously." SaaS stocks and BTC are both "long-term assets" whose value depends largely on expected future cash flows and market acceptance, and therefore are very sensitive to liquidity conditions and interest rates. “The rise in gold prices has effectively sucked out all the marginal liquidity that would have flowed into the Bitcoin and SaaS markets. There wasn’t enough liquidity to support all of these assets, so the riskiest assets took the hit.”

The UBS SaaS Index is highly correlated with Bitcoin. Source: Raoul Pal

4. Operation Giant Whale

On January 31, according to monitoring by on-chain analyst Ai Ai (@ai_9684xtpa), the whale address 0xd90...2D975 deposited 6 million USDC into Hyperliquid, and then placed a buy order to buy the bottom: it planned to buy 73.46 BTC in the range of 60,555-75,555 US dollars, about 5 million US dollars. It is also planned to buy 100,000 HYPE in the range of 15-20.38 US dollars, which is about 1.77 million US dollars.

On February 1, according to MLM monitoring, "1011 Insider Whale" Garrett Bullish (@GarrettBullish) had a full liquidation on Hyperliquid, with the size of a single liquidation exceeding US$700 million. Data shows that its cumulative losses on Hyperliquid in the past two weeks have been approximately $270 million.

On February 2, the "smart money who made a profit of US$99.22 million in the ETH band" once again spent US$85.91 million to buy ETH and BTC at the bottom. The smart money withdrew 20,392 ETH from major exchanges, worth US$47.17 million, with an average price of US$2,313.35. In the past 2 hours, it opened a position of 500 cbBTC for the first time, worth US$38.74 million, with an average price of US$77,484.46.

2. How do industry insiders view the future market conditions?

• Ki Young Ju, CEO of CryptoQuant:Bitcoin prices continue to fall as selling pressure continues and there are no new inflows. Early holders are sitting on huge unrealized gains thanks to buying in the ETF and MSTR. They started taking profits early last year, but strong inflows kept Bitcoin prices near $100,000. Today, those inflows have dried up. MSTR is the main driver of this rally. Unless Saylor sells off its holdings significantly, the market won't see a 70% plunge like in previous cycles. The current market bottom is not yet clear, but this bear market could result in a broad-based sideways movement.

• Three Arrows Capital (3AC) founder Zhu Su said in an article that judging from his past experience, "selling at the top" is often more risky than selling on the way down, becauseThe excitement brought about by successfully escaping from the top can easily lead to premature covering of positions and overconfidence. It is suspected that after Garrett made hundreds of millions of dollars in gains in the October 10 incident, he may have been affected by a similar complacency and thus took higher risks in subsequent transactions.

• ETF analyst Eric Balchunas said: The negative sentiment surrounding Bitcoin’s recent price action relative to gold and silver is “very short-sighted.” “Bitcoin sweeps through 2023 and 2024, and even though other assets are having their best year ever while Bitcoin is stagnant, they still haven’t caught up to Bitcoin.” Bitcoin’s “institutional narrative” was quickly digested, even before it actually happened. So it needs to take a breather and let the actual narrative keep pace with the price.

• Coinbase Chief Commercial Officer Shan Aggarwal: Despite the "low" market sentiment, if you pay attention, you can spot the signals. Traditional financial institutions are adding staff, with several including Mastercard, PayPal, American Express and JPMorgan Chase posting job ads related to cryptocurrency. This is just a temporary blip and we are just getting started.

• Huntley Horsley, CEO of Bitwise:“The cryptocurrency space is rapidly moving towards the mainstream.”

• Matrixport: The marginal demand on the traditional finance (TradFi) side may have reached saturation in stages. From the perspective of time rhythm, July was the last obvious window for net inflows, and since then the momentum of funds has continued to weaken. The report pointed out that Bitcoin may need a "narrative restart" or a new core pricing mainline to form substantial support at the level of funds and expectations and attract TradFi funds to return; The current trend is more likely to be a phased correction rather than a long-term trend reversal.

• Raoul Pal, co-founder and CEO of Real Vision: The selling pressure is expected to clear by the end of February, Bitcoin may quickly rise to $140,000. At the same time, Strategy’s debt risk is believed to be controllable, and Saylor has optimized its balance sheet through debt issuance and equity.

• Well-known trader and chartist Peter Brandt , who successfully predicted the 2018 Bitcoin crash: Bitcoin will fall to $58,000, suggesting a continuation of the bear market.
  

• PlanC : Bitcoin’s downward trend reminded him of several past crashes, such as the 2018 bear market that saw Bitcoin drop to $3,000, the March 2020 plunge that saw Bitcoin drop to around $5,100, and the collapse of cryptocurrency exchange FTX, which saw Bitcoin drop to around $15,500. "It's very possible that we are experiencing another major cliff-hanger. The ultimate low appears to be between $75,000 and $80,000."

• PlanB:The price of Bitcoin closed at US$78,635 in January, down about 38% from its historical high. The current 200-week moving average of Bitcoin is about US$58,000, and the realized price is about US$55,000 and showing a downward trend; at the same time, RSI has fallen below 50 and entered the "bear market zone" defined by its model. Judging from historical rules, Bitcoin may fall back to the 200-week moving average or near the realized price during the bear market stage. However, it also pointed out that the momentum of this bull market stage is relatively weak and there is no strong top signal, so the subsequentbear market retracement may be relatively limited.
  

• Senior trader Peter Brandt: Bitcoin prices could hit a low of $60,000 by the third quarter of 2026.

• Cryptocurrency analyst Benjamin Cowen: Bitcoin’s market cycle low could come in early October, but he “expects a lot of rallies between now and then.”

• Urian Timmer, Fidelity’s head of global macroeconomic research: 2026 could be a “down year” for Bitcoin, with prices potentially falling as low as $65,000.

• Cmt_trader Forecast:$74,400 and $49,180 are the two main downside liquidity targets in this bear market.

• Andri Fauzan Adziima, Head of Research at Bitrue: The gap between $77,000 and $84,000 could become attractive to traders once volatility narrows. "With the current pressure, there may not be a close this week, but if oversold conditions ease, a rebound could push it towards $84,000 in the coming weeks."
  

• On-Chain College states: Bitcoin has now lost its true market mean – the total cost basis of the current active BTC supply. "Bitcoin is currently below the true market mean ($80,700), which is the first time this has happened since October 2023, when Bitcoin was priced at $29,000. In short, this is negative for Bitcoin's short- and medium-term price action."

• Bitrue Analyst: BTC target price is $60,000 to $70,000.

• CoinEx Analyst: The $68,000 to $70,000 range is a key support area.

• Former hedge fund manager and CNBC host Jim Cramer said this morning that as the price of Bitcoin drops to US$77,000, buyers are expected to enter the market in a concentrated manner, pushing the price of Bitcoin back to the USD 82,000 level.
  

• Investment Analysts at Fisher8 Capital:The largest discretionary purchasers, like corporations, may now be “impossible”. "Retail investors' speculative funds have turned to space stocks, artificial intelligence stocks and storage stocks. Funds need a reason to favor crypto assets again."

3. How are the treasury companies doing?

Faced with such a decline in the encryption market, treasury companies are obviously not having a good time.

Strategy and Bitmine are the largest Bitcoin treasury and Ethereum treasury companies respectively. For these two companies, the current market conditions are undoubtedly a huge test.

1.Strategy will not sell off

According to CoinGecko data, the cost price of BTC held by Strategy is US$76,037, and the current BTC price once fell below its cost price. As of noon today, according to Lookonchain monitoring, as Bitcoin fell below $75,000, the 712,647 BTC held by Strategy faced an unrealized loss of more than $900 million.

But Strategy's balance sheet is not stressed and there is no risk of being forced to sell. Strategy currently holds all Bitcoins as unsecured assets, which means that these positions are not pledged as collateral, so even if the BTC market price falls below the purchase cost, it will not be forced to sell.

Some may question what will happen to the $8.3 billion in convertible debt on the company's books when the price of Bitcoin falls below the threshold. The debt load may seem large, but it also provides great flexibility. Strategy can extend the maturity of the debt (roll over the debt) and convert it into equity when it matures (the first convertible bond has a call date until the fourth quarter of 2027).

Historically, Strategy has primarily funded its Bitcoin purchases by issuing new shares at market price (ATM). This means that when a company wants to raise money by issuing stock, it instructs its broker to sell shares at the current market price, rather than selling a large number of new shares at a discount. The aim is to sell the shares into the open market, thus minimizing the impact on the market price.

Strategy only performs well when a stock trades above its net asset value (mNAV). mNAV is a metric used to compare a company’s market capitalization to the real-time market value of its Bitcoin holdings. On Friday, when Bitcoin was trading around $90,000 to $89,000, the strategy’s multiple was around 1.15x, indicating that it was priced above the value of its Bitcoin holdings. But with Bitcoin prices falling from around $85,000 to mid-$70,000 this weekend, that premium has now turned into a discount below 1x, making new equity financing less attractive.

Therefore, trading below cost does not constitute a crisis.

2.Bitmine lost US$6 billion

According to portfolio tracking data provider Dropstab, Bitmine increased its holdings by more than 40,000 Ethereum last week, bringing its total holdings to approximately 4.24 million Ethereum. The latest buying action puts its balance sheet strategy back in the spotlight.

According to on-chain analyst Ember Monitoring, Bitmine currently holds 4.243 million ETH, with an average cost price of US$3,849. As ETH fell to around $2,400, the institution's Ethereum holdings hit a record high of floating losses, reaching $5.92 billion, and the loss has exceeded one-third (-36%).

Tom Lee is more cautious about the short-term prospects of the crypto market. He warned: The market is still deleveraging and may experience a period of turmoil in early 2026 before things stabilize. October’s massive sell-off, which wiped out $19 billion in market capitalization, was a critical turning point in resetting cryptocurrency holdings.

4. Binance is late

On January 29, Binance announced in an "Open Letter to the Crypto Community" that Binance will adjust the asset structure of the SAFU Fund and gradually convert the original stablecoin reserves of US$1 billion into Bitcoin reserves, and plans to complete the conversion within 30 days after the announcement. Binance will conduct regular checks on the asset size of the SAFU Fund. If the market value of the SAFU Fund falls below US$800 million due to fluctuations in Bitcoin prices, Binance will replenish Bitcoin to restore the fund size to US$1 billion.

But even though the price of BTC fell below the $75,000 mark, Binance made no specific moves. As of this afternoon, Binance’s $1 billion SAFU fund address (0x420ef1f25563593aF5FE3f9b9d3bC56a8bd8c104) had just received 0.1 ETH, or Gas as a transfer.

Some insiders previously pointed out that Binance’s $1 billion fund is equivalent to placing a perpetual call option below the market. This would create a psychological “hard support level” for BTC. Whenever the price pulls back sharply, the market anticipates Binance’s buying orders to cover positions, thereby preventing the price from falling further. However, as of press time, Binance has not yet made any buying action, perhaps waiting for a better buying opportunity.