Is This a Crypto Winter or the Final Shakeout Before the Next Cycle?

Yes, this is a true crypto winter, but it is also the final shakeout before the next cycle, according to Bitwise CIO Matt Hougan. He says the market is not in a normal correction but in a harsh winter similar to 2018 and 2022, which began in January 2025 and was hidden by massive ETF inflows.

With Bitcoin down ~39% and Ethereum over 50% from their peaks, Bitwise CIO Matt Hougan believes the market is forming a “rounding bottom” where despair signals a turning point. 2026 is not a bear-market year in the view of Bitwise CIO Matt Hougan, but the start of a new institutional-driven cycle.

Bitwise CIO Matt Hougan expects Bitcoin to consolidate between $75,000 and $100,000 in the first half of 2026, then break to a new all-time high in the second half as institutional flows, falling rates, and lower volatility replace the old four-year cycle.

Is BTC in correction or bear market? Liquidity and support explain

Bitcoin is structurally in a crypto winter, but liquidity behavior suggests a late-cycle phase rather than the start of a multi-year collapse, according to Bitwise CIO Matt Hougan. He says the cycle downturn began in early 2025, even though the price peak came later, and that institutional flows disguised the depth of losses.

Price and market damage

• BTC down ~39% from Oct 2025 high
• ETH down ~53% from its peak
• Total crypto market lost ~$1.7T (39%) from last year’s top

Five-day crash snapshot

• BTC: -13% to ~$77,800
• ETH: -24% to ~$2,293
• XRP: -15% to ~$1.62
• SOL: -18% to ~$102

Why this still looks “late-cycle”

• ETFs and treasuries bought >744,000 BTC (~$75B), cushioning price and likely preventing a deeper drawdown.
• Capital rotated into stablecoins instead of exiting crypto; stablecoin trading volume hit $33T (record).
• Hougan compares today to 2018 and 2022: excess leverage + OG profit-taking drive capitulation near bottoms.

$60,000 support: price, volatility, and cycle timing implications

$60,000 is the macro decision zone that separates a super-correction from a confirmed bear market.Holding it preserves a higher-low structure; breaking it confirms trend failure.

Key technical zones

Why $60k is structurally critical

• Former 2021 cycle high
• ~7% of long-term holders accumulated here
• 200-week MA at $58k–$62k

Volatility exhaustion

• Fear & Greed Index: 14 (Extreme Fear)
• Liquidations: $2.53B in one day
• BTC down 39%, ETH down 52% since peaks

Spot Bitcoin ETF flows and AUM since January 2024

Spot Bitcoin ETFs are the primary liquidity firewall and the clearest confirmation tool for Bitwise CIO Matt Hougan’s thesis. They have become the dominant transmission channel between traditional capital markets and the crypto cycle.

As of February 3, 2026, total spot Bitcoin ETF assets under management stood at approximately $113.17 billion. After explosive growth in 2024 and 2025, the market has entered a capital flow correction phase.

In 2024, spot ETFs attracted over $35.2 billion in net inflows, with BlackRock’s IBIT becoming the fastest-growing ETF in history. In 2025, total AUM peaked above $137 billion and IBIT alone surpassed 800,000 BTC in holdings.

From late 2025 through January 2026, the market recorded three consecutive months of net outflows totaling around $6 billion. In early February 2026, this trend showed early stabilization when ETFs recorded a $562 million net inflow, led by Fidelity’s FBTC.

Crypto winter endgame: confirmation checklist and invalidation criteria

$60,000 hold vs break: drawdown context and consolidation structure

Holding above $60,000 confirms a re-accumulation phase, while a break below it confirms a true bear market. If Bitcoin holds this zone for several months, Wyckoff theory suggests a transfer of assets from weak hands to institutional buyers. If price closes below $58,000 on high volume, the market signals structural failure and opens downside toward $48,000.

ETF inflow and outflow momentum, AUM trend, and sentiment gauges

Bottoms are confirmed by liquidity exhaustion, not price alone.

Endgame checklist

• Liquidations > $1B
• MVRV Z-Score < 0.1
• Weekly RSI divergence
• ETF inflows for multiple days

Invalidation

• ETF outflows > $5B/month
• Weekly close < $58k

Bitwise CIO Matt Hougan vs Bernstein: what would prove each view

Hougan is validated if institutional buying defends $60,000, while Bernstein is validated if Bitcoin drops to that region and then rebuilds a new cycle base. Both views converge on the same threshold. What differs is the interpretation of that support zone’s role in the next cycle.

2025 to 2026 outlook: scenarios, risk drivers, and institutional positioning

Scenario ranges and triggers into 2025 to 2026

Three primary scenarios define Bitcoin’s macro path through 2026. Bull conditions project $150,000 to $200,000 if the Fed cuts aggressively and sovereign reserves adopt Bitcoin. Base conditions imply $70,000 to $110,000 with stable ETF inflows. Bear conditions point to $45,000 to $60,000 under recession and regulatory tightening.

Macro: yields, Japan policy shifts, dollar, risk-off, volatility

Geopolitical shocks and central bank hawkishness are the dominant downside risks.

• Trump nominating Kevin Warsh triggered dollar surge
• US warships toward Iran, shutdown fears, tariffs
• Gold > $5,000, ETFs bleeding, DXY strength

Institutional sizing, rebalancing cadence, risk bands, and Ethereum spillover

Institutions now treat Bitcoin as a risk-banded macro asset, reinforcing Bitwise CIO Matt Hougan’s outlook. Standard allocations range from 1 to 3%, but increase toward 5% near the $60,000 to $65,000 discount zone. Rebalancing occurs quarterly, which may concentrate demand in late Q1 2026.

Ethereum weakness also channels liquidity back into Bitcoin. When ETH underperforms, capital rotates toward BTC as a digital safe haven, reinforcing its market dominance during late-cycle stress.