Bitcoin has fallen below $85,000 , marking a 22% decline from its all-time high of $109,000 in January. The drop follows accelerating outflows from Bitcoin ETFs and broader macroeconomic uncertainty.
Over February, investors have pulled over $2 billion from spot Bitcoin ETFs, the largest outflows since their launch. Meanwhile, gold ETFs have seen rising inflows, suggesting investors are shifting toward traditional safe-haven assets.
Despite the downturn, Ki Young Ju, CEO of CryptoQuant, reassured investors that a 30% correction is normal in a Bitcoin bull cycle.
“A 30% correction in a Bitcoin bull cycle is common — It dropped 53% in 2021 and still recovered to an ATH,” he noted .
While some fear this could signal the start of a bear market, Ju remains confident in Bitcoin’s long-term trajectory.
"I don’t think we’ll enter a bear market this year. We’re still in a bull cycle. The price would eventually go up, but the range seems broad," he wrote.
Ju pointed out that Bitcoin would need to fall significantly below $75,000 before he would consider himself wrong about the current market cycle.
"The cycle I’m referring to includes a potential 30% drawdown at some point. If the price drops significantly below $75K, I’d be wrong," he added.
Macroeconomic and market pressures weigh on Bitcoin
Bitcoin’s fall coincides with shifting Federal Reserve rate expectations, as recent inflation data dampens hopes for imminent rate cuts. Higher rates typically weigh on risk assets like Bitcoin, which rallied in late 2024 partly on expectations of looser monetary policy.
Market jitters have also been fueled by geopolitical tensions, as the Trump administration’s new tariffs on China, Mexico, and Canada have rattled global financial markets.
Adding to the pressure, last week’s record-breaking $1.4 billion hack of Bybit has shaken investor confidence.
History suggests Bitcoin could recover
Bitcoin has seen at least 16 major corrections from all-time highs, with past declines ranging from 30% to as much as 85%.
Even in 2024, Bitcoin suffered a 33% drop between March and August, only to reach a new high in November. However, longer bear markets, such as the 78% crash in 2021-2022, took years to recover.
Ju remains confident in the broader Bitcoin bull cycle, noting that spot volume was highly active around $100K, indicating that traders are still engaged.
"In distribution phases, prices drop when new liquidity dries up. The key question regarding whether the BTC market will face years of bear markets is: Where will fresh liquidity come from?" he asked.
