I recently reviewed the market decline in crypto during February this year—and it’s really not just caused by a single event. It was a perfect storm of six macro and structural factors converging simultaneously.

First was the tariff shock. On 02/23, Trump announced a 15% global tariff increase—Bitcoin immediately dropped over 5% within a few hours. The crypto market is trading like a macro risk asset rather than a hedge tool. When trade policies tighten, cryptocurrencies sell off along with stocks.

Second, the collapse of tech stocks dragged everything down. Microsoft’s earnings report disappointed investors, causing its stock to fall 10% in a single session. That move spread across the entire market. I’ve noticed a significant correlation between crypto and tech stocks increasing in 2025–2026—when Nasdaq is bleeding, Bitcoin is bleeding too.

Third, the massive liquidation numbers. In the first weekend of February, what traders call “Black Sunday II” generated $2.56 billion in liquidations in one day—ranked as the 10th largest event in crypto history. But the real record came a few days later: on 02/05, realized losses adjusted for Bitcoin’s entity reached $3.2 billion—a record all-time high. On that day, Bitcoin registered a -6.05σ move on the Z-score—among the fastest single-day crashes in history.

Fourth, institutions shifted from buyers to sellers. In 2025, Bitcoin spot ETFs were net buyers of 46,000 Bitcoin. By 2026, they became net sellers—a complete reversal. Investment products recorded two consecutive weeks of outflows totaling $1.7 billion. Long-term Bitcoin holders—“Bitcoin OGs”—are mostly selling, according to Bloomberg data.

Fifth, Bitcoin broke below the 365-day moving average for the first time since March 2022. This was a key support level that held throughout the 2023–2025 bull market. Weekly RSI also dropped below 30 for the first time since mid-2022—a historic signal marking the bottom or the start of a prolonged bear market.

Sixth, geopolitical risks. The increased U.S. military presence in the Middle East is heightening fears of conflict involving Iran. As investors fear escalation, they sell risk assets first. Crypto, as the most liquid risk asset 24/7, is always among the first to go. Gold and silver also declined—a rare signal indicating investors are moving into cash rather than just rotating between assets.

Looking at the current figures (as of 04/02/2026): Bitcoin at $66.63K (-2.41% 24h), Ethereum at $2.06K (-2.39% 24h), XRP at $1.31 (-2.66% 24h), Solana at $79.08 (-5.40% 24h). Bitcoin has fallen 52% from its October 2025 peak of $126,000. The Fear & Greed Index stands at 11—extreme fear.

The big question now is: is this a bear market or just a deep correction? VanEck analysts describe it as “deleveraged decline rather than capitulation”—noting that leverage has normalized, and volatility remains below previous bear market levels. But others, like Nic Puckrin of Coin Bureau, have a more bearish view, calling it “a transition from distribution to re-accumulation.”

Historically, Bitcoin enters a correction phase about 12–18 months after reaching its all-time high—this would place the current cycle within a correction window consistent with previous patterns. The depth and duration are still uncertain.

Signals analysts are watching for a turning point: Bitcoin stabilizing above the old 2021 ATH of $69,000 would indicate a key support level has been reclaimed. If ETF inflows reverse and start to grow again, that would be a psychological sign that the bottom has been reached. Clarity on tariffs is also crucial—if fears ease through negotiations, risk assets including crypto could see a mild rally. Finally, if the Fear & Greed Index moves above 25, it would suggest that selling out of fear is drying up.

Overall, this decline isn’t caused by a single event but is the result of months of distribution from the top. Whether this is a correction or a full-blown bear market depends on whether macro conditions—especially tariff policies and geopolitical risks—stabilize in the coming weeks. For now, everything remains open.