Bitaigen Research Bitcoin has fallen 13% this month, a pattern that aligns more with a healthy, phased correction within a bull market rather than signaling the definitive end of the rally. Driven by tightening macro‑level liquidity and the pressure of leveraged liquidations, the current pull‑back resembles a market‑self‑adjustment.
News: On February 2, the Bitcoin price slipped to $74,560 per coin, a 13% decline for the month and a cumulative retracement of 38% from the all‑time high of $125,000 set in October 2025. By the time this article was drafted on February 3, the price had recovered to $78,858, a 24‑hour rise of 3.76%. Market sentiment is swinging violently between fear and greed, and institutional fund flows are showing divergent trends.
Is the 13% monthly plunge in Bitcoin the final nail in this bull run, or merely a healthy correction?
Below we examine the root causes of this pull‑back from three angles—market structure, macro‑environment pressures, and industry paradigm shifts—and outline possible future trajectories.
From the perspectives of market structure, macro‑liquidity, and sector trends, we systematically dissect the underlying drivers of Bitcoin’s recent sharp correction and propose potential evolution paths. Reading this piece can help you determine whether we are witnessing a short‑term adjustment or a turning point in the bull market, enabling more informed decisions.
Bitcoin’s 13% Monthly Decline – Market Snapshot
Since reaching a historic peak of roughly $126,000 in October 2023, Bitcoin has been under persistent pressure. By February 3, 2026, it had slipped to about $77,200, marking a cumulative drawdown of over 38% and a 13% drop for the month alone. Notably, Bitcoin has posted four consecutive months of losses—the longest streak of declines since 2018.
Price Overview as of February 3
This weakness has spread across the broader crypto market. On February 2, Ethereum fell 3.79% in a single day to $2,246, while XRP posted a 12% decline over the past week. The fear index dropped to 15, indicating extreme panic. On February 1, the total value of contracts liquidated across the network in the preceding 24 hours hit $2.559 billion, affecting more than 420,000 participants, with a pronounced share of long‑position liquidations. This suggests that the current downturn is not driven primarily by panic selling; rather, it reflects a lack of buying pressure and thin liquidity, creating a vicious cycle of “price decline → leveraged liquidations → intensified sell pressure.”
*Global contract liquidation snapshot on February 1, source: Coinglass*
The slide also highlights lingering confusion over Bitcoin’s asset‑class identity: it failed to rally alongside traditional safe‑haven assets, yet it fell in lockstep with risk assets, putting its core narrative under serious scrutiny.
Reasons Behind the 13% Monthly Drop in Bitcoin
The 13% monthly decline this time is largely the result of Federal Reserve policy shifts. Former Treasury official Kevin Warsh, a potential successor to the chairmanship, is viewed as an hawk who prioritises balance‑sheet reduction over rate cuts, sparking concerns about tighter liquidity, a stronger U.S. dollar, and pressure on high‑risk assets.
From an internal market viewpoint, capital is exiting en masse. In January 2026 alone, Bitcoin spot ETF products recorded a net outflow of $1.61 billion. Prominent bullish voices are also turning bearish; for example, Christopher Wood, Global Equity Strategy Head at Jefferies, announced at the end of January that he had liquidated his Bitcoin holdings and reallocated assets to gold.
*Bitcoin ETF net flow data, source: Coinglass*
At the same time, excessive leverage in the market amplified the downtrend. Within the past 24 hours, forced liquidations of long positions across the network exceeded $199 million, magnifying price volatility.
In sum, the 13% monthly slide reflects both a shock from shifting macro‑liquidity expectations and the clearing of an over‑leveraged bubble. While the short‑term pain is sharp, it may lay the groundwork for a healthier market environment ahead.
Bull Market End or Healthy Correction?
Institutional and Market Opinions
Analysts are split on the current trajectory, forming distinct camps:
| View Camp | Representative / Institution | Core View |
|---|---|---|
| Pessimistic | CryptoQuant analyst | Multiple key support levels have been broken; the market structure has shifted, possibly already entering a **bear market** |
| Pessimistic | Pimco | The **Bitcoin** narrative is weakening; price declines indicate that crypto is not the monetary revolution once touted |
| Optimistic | Uweb Business School | Seen as a healthy correction; future volatility will depend on U.S. economic data and monetary policy |
These divergences essentially capture the growing pains of Bitcoin transitioning from a “speculative asset” to a more “institutionalised” one. Short‑term swings may be intense, but long‑term value will continue to hinge on real‑world use cases and the maturation of regulatory frameworks.
Outlook for Future Price Action
Whether Bitcoin can rebound after a 13% monthly drop hinges on three concurrent factors, according to the crypto‑news outlet CoinDesk:
- Regulatory clarity – The advancement and eventual passage of the CLARITY Act in the U.S. Senate would furnish the industry with a clear compliance roadmap, reducing uncertainty and paving the way for fresh capital inflows.
- Macro environment – Should Kevin Warsh maintain his stance that balance‑sheet reduction takes precedence over rate cuts, liquidity will stay constrained, keeping Bitcoin under short‑term pressure.
- Capital inflows – With $1.61 billion net outflows from Bitcoin ETFs in January 2026, a decisive injection of long‑term capital—such as pension funds from the United States (via Binance.US rather than the global Binance platform) or European investors using SEPA/SWIFT channels—will be essential to alleviate the liquidity squeeze.
On‑chain metrics also offer clues. Glassnode data shows the average all‑time cost basis for Bitcoin on the network at roughly $55,900, while the current price sits below the short‑term holders’ cost basis of $95,400. Additionally, the ahr999 indicator fell beneath 0.45, a level not seen since October 2023; historically, this signal has often preceded bottoming phases.
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This article has provided a concise analysis of whether the 13% monthly plunge in Bitcoin marks the end of the bull market or a healthy correction. For further reading on Bitcoin’s bull‑run dynamics, search for past Bitaigen (比特根) articles or continue with the related pieces below. Thank you for your continued interest and support!
*Note: Crypto gains may be taxable in your jurisdiction; consult a tax professional for guidance.*
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