Cryptocurrency Crash: End of the World or Light at the End of the Tunnel

By the end of the first ten days of February 2026, some retail players in the crypto market had gone gray, seeing at best a twofold drop in the value of their crypto portfolio, and at worst zero after millions. Other players immediately moved to the stage of detachment by signing up for enlightenment courses: indeed, that is better than looking down from the open window of the 75th floor.

If viewed through the prism of derivative instruments (futures, options, ETFs) while taking into account the involvement of different players, the strongest crypto winter in the entire history of the market is now being observed. However, outside the window is also the coldest winter in the last 10-15 years.

Be that as it may, both the enlightened and the graying crypto traders who remain in the game are asking a perfectly reasonable question: how long will the crypto winter last, and how can one wait for the arrival of spring?

Losses in the capitalization of the crypto market at the moment exceeded $1 trillion, or more than 35% (excluding BTC, the collapse was 39%). From capitalization highs around $4 trillion reached in October 2025, the crash amounted to just under 57%! At the bottom on February 5-6, capitalization was only about $1.75 trillion.

In altcoins, capitalization dropped to the lows of October 2023, while scam coins showed a historic low.

From the highs of January 29, 2026, cryptocurrencies collapsed as follows: BTC lost 32.8%, ETH lost 42.2%, SOL lost 46.2%. Other popular instruments declined by comparable values.

At the same time, despite the red tape, at the market bottom no escalation of liquidations is visible. This is direct evidence that leveraged players were swept away a little earlier.

The peak of margin position liquidations in this wave of short impulse was recorded on January 31, when $2.4 billion was wiped out. And on February 5, margin players totaling $1.84 billion left the chat.

Over 9 days, the estimated volume of liquidations amounted to just over $8.6 billion (according to Coinglass and other sources). For understanding and comparison: during the 9 days from October 11, 2025, more than $20 billion left the market. So in this respect, everything remains within acceptable limits, though not a very pleasant one.

It is also worth paying attention to the absence of a multiplicative effect in altcoins. The usual pattern is this: when BTC falls by 5%, altcoins collapse by 10-12% to 20-30% (depending on the quality and popularity of the coin).

Right now, low-cap altcoins showed a weighted-average decline of 42%, which is comparable to the decline in ether (ETH). Only the most dangerous shitcoins fell by more than 80%, and that is exactly where they belong.

These metrics indicate that retail is no longer as active in altcoins, which means there is not really anyone left there to destroy.

And the most important thing, in my view: the outflow from ETFs is not panic-driven.

From January 29 to February 4, only $1.6 billion left BTC - this figure is far from panic selling. For example, from October 29 to November 7, 2025, $2.4 billion left ETFs, and from November 12 to 20, 2025, another $3.1 billion was withdrawn. The figures are incomparable.

Let us also recall that since the start of ETF trading in BTC, net cash flow amounted to $55.2 billion, which effectively stopped by mid-July 2025. Since October 2025, about $8 billion has left in total, of which only $1.9 billion was in 2026.

The collapse in the markets happened at a very interesting time. It is notable because very soon, on May 15, 2026, Mr. Powell will be replaced by Mr. Warsh as head of the Fed. That means it is better to create the necessary overbought conditions a little earlier, so that all the blame can be pinned on the already lame-duck Powell.

Thus, starting from June 17 (the Fed meeting), an easing of monetary policy may begin (but does not have to), which will provide fuel to all markets, including crypto.

In November 2026, the United States will face elections to the Senate and the House of Representatives. Note that Trump does not at all want to lose the majority of votes in the legislative bodies of power.

There are different ways to butter up voters, but in the US there are two reliable ones: lower retail gasoline prices and send the stock markets off to conquer all-time highs. Given the specifics of the moment, we should also include a possible recovery of cryptocurrencies here. After all, Trump is the first "crypto president."

Of course, the elections are still far away, but that also means everyone will have enough time to build up liquidity, even a Black guy from the Bronx.

In short, every Fed meeting from June through October may be (but does not have to be) the launch point for the rocket. As long as inflation does not take off ahead of time and ruin all these brilliant plans (if they exist).

Crypto is, after all, a people's instrument. Maybe the most popular one of all at the moment. And the people (people here means anyone: American, Russian, or Nigerian) had a pretty good amount of money taken from them at the end of 2025 and the beginning of 2026.

There is not much time to earn cash again and deposit it into the casino, oops, put it into a brokerage account. Either institutions or old crypto holders should help here.

And Trump himself may once again provide media support: they will pass laws, give budgetary backing, and once again talk about the prospects.

But there is another side of the coin: ETFs and pension funds. Above, we already assessed the outflow of money from ETFs, and it is within acceptable limits. As for pension funds, they were only planning to launch investment products with bitcoin in the portfolio by the summer of 2026.

And here is the question: can funds buy up crypto at the lows so that at the end of the year they can show magnificent reporting and thereby attract the capital of millions of future pensioners specifically into these products?

To understand the situation in more detail from the point of view of the game itself, you need to look at the multi-year auction in BTC (Binance data as one of the largest venues).

The starting point is the end of October 2023, when BTC, together with the stock market, went off to conquer new all-time highs.

Weekly ranges last week were the largest for this period, not counting the beginning of October 2025.

Weekly vertical volumes are elevated, but not extreme. This may indicate that not everyone had their money taken away, or that no one else wants to give it up and is ready to hold, and therefore defend the current levels. I lean toward the second point of view.

The value area for all of 2024 is the 56500-70000 range. That is where we came to. It was here that colossal interesting tactical volumes passed, which I wrote about in detail in another review.

If you look at the timing of the correction at the beginning of 2025, different schemes were played there, but on similar volumes. Back then, the accumulation of reversal volumes took about two months.

What is stopping the price from hanging around somewhere in the 50000-70000 area for two, or maybe even three months (just until Warsh ascends to the Fed throne)? By the way, nothing is stopping it from working in the 70-85 thousand area for those same 2-3 months either.

In any case, the entire 2025 platform is a serious armor-piercing slab that no bear will break through.

As for a V-reversal, I am not especially expecting it on the weekly TF. Although the prospects of seeing 80-85 thousand are likely in the near term. And why is that not a V-reversal on a lower TF?

Everything indicates that the market has shown the bottom. The only question is how long it will trade here and in what form liquidity will be accumulated for purchases.

There has not been such a psychological knockout in the crypto market even during the collapse of the FTX exchange.

Usually traders do not return for a long time to the place where they got hit over the head. But the times and traders are not the same anymore. Corrections have become shorter, and traders' long-term memory has atrophied. Therefore, there is a high probability that tweets on X and videos on TikTok will help gamblers regain their spirits so they can once again believe in the bright future of cryptocurrencies.

On the other hand, there are many objective factors hinting that the crash is over. This does not mean they cannot renew the bottom, it means they have come into a value zone where buyers feel confident. And the extra passengers had their money taken away much earlier.

Among the hints of the end of the crash:

Thus, it is better to set panic aside, reduce the level of leverage, and simply wait for the moment to enter the market. And remember that money loves silence.