Bitcoin Plunges Below $61,000 as Crypto Bear Market Takes Hold

The cryptocurrency market has entered a steep downturn in February 2026, with Bitcoin crashing from its October 2025 all-time high of over $127,000 to briefly dip below $61,000. The flagship cryptocurrency lost nearly 30% in a single week, marking the most dramatic sell-off since the 2022 crypto winter and raising fears of a prolonged bear market.

Institutional Selling Reverses

While institutional investors were previously credited with supporting Bitcoin's price through ETF inflows, those same participants now appear to be selling. CryptoQuant reports that institutional demand has "reversed materially," with U.S. ETFs that purchased 46,000 Bitcoin at this time last year now becoming net sellers in 2026. The shift marks a fundamental change in market dynamics.

BlackRock ETF Shows Resilience

Despite the market turmoil, BlackRock's iShares Bitcoin Trust (IBIT) has shown remarkable holder resilience. Robert Mitchnick revealed that only about 0.2% of IBIT holders redeemed during the worst of the sell-off, suggesting long-term institutional holders are not panicking even as prices crater.

"2026 I expect to be a bear leg to the four-year cycle. The typical bitcoin halving cycle is very much intact." — Steven McClurg, CEO, Canary Capital

Analysts See Bottom Forming

Compass Point analysts say the crypto bear market is in its "final innings," with Bitcoin likely to bottom between $60,000 and $68,000, absent a broader U.S. equity bear market. They see strong long-term holder support around $65,000. Bitcoin closed at $68,900 on the CME as of mid-February, with volatility cooling and price action potentially staying range-bound.

Macro and Geopolitical Headwinds

The sell-off has been driven by multiple factors: a global stock sell-off amid geopolitical uncertainty, gold and silver volatility, and the unwinding of leveraged positions. More than $777 million in crypto long positions were liquidated in a single hour during January's sharp decline, demonstrating the fragility of the leveraged crypto market.

Regulatory developments continue in the background. The U.S. Senate Agriculture Committee advanced a crypto market structure bill granting the CFTC authority over digital commodities, while X (formerly Twitter) prepares to roll out crypto and stock trading on its platform. Grayscale has also submitted an S-1 filing for a proposed AAVE ETF, suggesting institutional interest persists despite price declines.