Crypto Winter Deepens: How Long It Will Last and the Next Bitcoin Level to Watch
Published: February 4, 2026 | Updated: February 4, 2026
Bitcoin’s recent sharp decline has sent reverberations throughout the cryptocurrency market, raising concerns about how long the current "crypto winter" will persist and what key price levels traders should monitor next. This week, Bitcoin briefly fell below $73,000, edging closer to a critical threshold that traders and analysts say could mark the next phase of downside risk.
Approaching a Critical Bitcoin Price Point
Bitcoin is currently testing the $70,000 level, which Citi analysts identify as a pivotal price zone. This level represents Bitcoin’s value before a dramatic post-U.S. election rally that propelled the cryptocurrency to an all-time high of just over $126,000. Citi’s Alex Saunders explained in a recent client note, “We believe Bitcoin prices are approaching key levels. We are now below our estimated average U.S. spot-ETF entry price of $81.6k and close to the approximately $70k pre-U.S. election price.”
Should Bitcoin breach this $70,000 threshold, the cryptocurrency could face further substantial declines over the coming months, according to Saunders and other market experts.
Potential for Further Decline – Could Bitcoin Sink to $38,000?
Adding to the cautionary outlook, a new analyst note from Stifel suggests that if Bitcoin’s downturn continues in line with historic market cycles, prices could fall as low as roughly $38,000. This projection underscores the potential depth of the current correction and the ongoing challenges facing the cryptocurrency market.
Bitcoin’s Recent Performance and Market Drivers
Over the past month, Bitcoin has plunged approximately 20%, recently hitting a low of $72,096.20. This drop places Bitcoin more than 40% below its record high. Several interrelated factors are driving this decline:
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Monetary Policy Concerns: Expectations are growing that the U.S. Federal Reserve will adopt a more hawkish stance, especially following the nomination last month of Kevin Warsh to a key policymaking position. This anticipated tighter monetary policy is weighing on risk assets, including cryptocurrencies, according to Deutsche Bank.
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Regulatory and Legislative Headwinds: Momentum around favorable regulation and legislation for digital assets in the U.S. has slowed down, contributing to uncertainty in the market.
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Institutional Outflows and Liquidity Drain: Large institutional investors have been withdrawing capital from Bitcoin, particularly from spot Bitcoin exchange-traded funds (ETFs), leading to a sharp decrease in liquidity. Deutsche Bank analyst Marion Laboure noted that Bitcoin ETFs have experienced billions in outflows monthly since October, peaking at around $7 billion in November.
Market Sentiment and Retail Adoption Trends
The Crypto Fear and Greed Index—a key gauge of investor sentiment—has plummeted to approximately 15 points, signaling "extreme fear" among market participants. This heightened fear is driving further selling pressures.
Additionally, retail interest in cryptocurrencies is waning. U.S. consumer adoption of crypto has fallen from 17% in July 2025 to just 12%, according to Deutsche Bank. Laboure highlighted that steady selling likely reflects a loss of interest from traditional investors and growing overall pessimism regarding the crypto landscape.
Looking Ahead
Given these dynamics, market participants are closely watching Bitcoin’s behavior around the $70,000 price mark. A break below this level could open the door to more substantial declines, potentially extending the current crypto winter.
Investors and traders may want to stay vigilant as Bitcoin navigates these crucial support levels amid an evolving economic and regulatory environment.
For continuous updates and more insights into the cryptocurrency market, stay tuned to CNBC Crypto coverage.