Bitwise CIO Declares Full Crypto Winter, Echoing 2018 and 2022 Patterns

VADODARA, February 3, 2026 — Matt Hougan, Chief Investment Officer at Bitwise Asset Management, has formally classified the current cryptocurrency downturn as a full-scale crypto winter. According to a report by The Block, Hougan asserts this is not a mere correction but a structural bear market phase. Market structure suggests this aligns with historical cycles of 2018 and 2022. This latest crypto news highlights institutional caution amid extreme fear sentiment.

Investigation: Institutional Diagnosis of a Bear Market

Hougan based his assessment on multiple data points. He noted the market downturn persists despite positive catalysts like regulatory improvements. The newly appointed Federal Reserve Chairman's pro-Bitcoin stance failed to lift sentiment. Hougan cited extreme fear levels as proof of a crypto winter. He argued strong ETF inflows masked an underlying bearish trend that began in January. The downturn has lasted over a year already. Past cycles ended with market fatigue, not enthusiasm. Potential recovery catalysts include U.S. economic growth and legislative bills like the CLARITY Act. Nation-state Bitcoin adoption could also spur a rebound.

Market Context & Historical Precedent

Historically, crypto winters exhibit specific liquidity patterns. The 2018 cycle saw an 84% drawdown from peak to trough. Similarly, the 2022 downturn erased $2 trillion in market capitalization. In contrast, the current decline shows a slower, more grinding structure. Underlying this trend is a divergence between price action and on-chain fundamentals. ETF inflows created a temporary liquidity grab, obscuring the true market direction. This mirrors the 2021 correction where leverage masked underlying weakness. Consequently, analysts now watch for capitulation events similar to past cycles.

Related developments include recent futures liquidations exceeding $411 million amid extreme fear, and Moscow Exchange expanding crypto futures to SOL, XRP, and TRX.

Technical Architecture & Price Action

Bitcoin currently trades around $78,037. The daily chart shows a series of lower highs since the October all-time high. A critical Fibonacci 0.618 retracement level sits at $75,000. This level coincides with a high-volume node on the volume profile. The 200-day moving average provides dynamic support near $72,500. RSI readings hover in oversold territory, indicating potential for a relief rally. However, order block analysis reveals significant sell-side liquidity above $82,000. Market structure suggests any rally faces immediate resistance at that level. The Federal Reserve's monetary policy, detailed on FederalReserve.gov, remains a key macro variable.

By The Numbers

Why It Matters

This declaration impacts institutional allocation models. Crypto winters typically see reduced venture capital funding and developer activity. Retail investors often exit during prolonged downturns. Market structure suggests we are in the accumulation phase of the cycle. Institutional liquidity cycles indicate a bottom formation process takes 12-18 months. On-chain data shows long-term holders are increasing their positions. This contrasts with short-term speculator capitulation. The current environment tests network security and decentralization assumptions.

Expert Commentary

"The market shows a very similar pattern to the crypto winters of 2018 and 2022. Despite positive news, sentiment remains at extreme fear. This confirms a full-scale crypto winter has begun. Past downturns ended with fatigue, not enthusiasm." - Matt Hougan, CIO at Bitwise, via The Block.

The CoinMarketBuzz Intelligence Desk adds: "UTXO age bands indicate increased hodling behavior. This typically precedes major trend reversals. However, macro headwinds from traditional finance could prolong the winter phase."

Market Outlook & Price Scenarios

Market structure suggests two primary scenarios for the coming quarters. The first involves a prolonged basing period between $72,500 and $82,000. The second scenario sees a breakdown to test the $65,000 level. Historical cycles suggest the latter would represent final capitulation.

• Bullish Invalidation Level: $82,000. A sustained break above this resistance, confirmed by increasing on-chain activity, would signal the winter phase is ending and a new uptrend is beginning.
• Bearish Invalidation Level: $75,000. A weekly close below this Fibonacci support, accompanied by high futures liquidations, would confirm a deeper correction toward $65,000 is likely.

The 12-month institutional outlook remains cautious. Recovery catalysts like the CLARITY Act could take 6-12 months to materialize. Nation-state adoption remains a wild card. Market structure suggests the next bull cycle will be driven by institutional infrastructure, not retail speculation.