Web3 had plenty to say about Bitcoin this week.
“Bitcoin has seen an abysmal start to the year, down 11% YTD so far and now trading below the average ETF cost basis and at Strategy’s (MSTR) cost basis for the first time since 2023. January also marks the fourth month in a row that BTC has finished in negative territory.
“The danger for Strategy isn’t as acute as it may seem, though. It isn’t facing forced liquidations or imminent deadlines, with the first tranche of the convertible bonds only due early next year. If the Bitcoin rout continues, they could refinance or roll the debt over, or they could even take out a term loan or revolving credit line on a portion of their Bitcoin. Other digital asset treasuries (DATs), however, may have fewer options available to them, and we may begin to see some capitulation or potentially distressed acquisitions by better-capitalized competitors.
“When it comes to future projections, it’s worth noting that the current drawdown marks a 40% drop from Bitcoin’s all-time high of around $126,000, which is far from extreme by historical terms. In the previous cycles, Bitcoin has dropped between 72% and 84% from peak to trough. However, with BTC’s volatility declining, we may well not see as deep a correction in this cycle.
“As Bitcoin continues its slide toward the psychological barrier of $70,000, it’s clear the crypto market is now in full capitulation mode. If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition from distribution to reset – and these typically take months, not weeks.
“We’re seeing large-scale selling by Bitcoin whales, and institutional outflows are mounting. At this point, expect a battle to defend the $70,000 threshold, but if Bitcoin breaks below this level, it could be heading for its bear market low around $55,700-$58,200.
“However, it is worth noting that while Bitcoin ETFs are seeing outflows, Bloomberg data shows the majority of ETF holders are sitting on paper losses, while Bitcoin OGs are doing most of the selling. This is Bitcoin’s institutionalization in action.”
– Nic Puckrin, investment analyst and co-founder of Coin Bureau
“It has certainly been a tricky few months for the digital asset market. Prices are down, with some analysts predicting BTC could decrease to as low as $50,000.
“This is caused by a number of factors. US Spot BTC ETFs have seen strong outflows, capital is increasingly moving into AI-linked equities and precious metals, and thinning liquidity has caused disproportionately large price drops.
“But it is important to distinguish market volatility with the underlying utility of digital assets. The fundamentals haven’t changed. Short-term price moves are often driven by liquidity and timing, not by a shift in underlying value.
“Weekends also matter more than people admit. Digital assets are one of the few open liquid markets when others are closed, so it often becomes the source of liquidity when capital needs to be quickly repositioned.”
– Diego Martin, CEO of Yellow Capital
“The dollar is flexing. This always creates friction for Bitcoin in the short term. What matters is that prices are holding firm at elevated levels rather than unwinding.
“This behavior points to a market that is absorbing pressure, not buckling under it, which is, typically, how bases are built.
“Dollar rallies have a history of interrupting Bitcoin’s momentum, not reversing it. They, typically, slow the move, they don’t cancel the destination.
“This is a very different market from earlier cycles. Bitcoin is no longer reliant on retail enthusiasm alone. Structural demand is broader, steadier and more disciplined.
“Persistent currency debasement risks, rising sovereign debt burdens and geopolitical strain continue to strengthen the investment case for scarce digital assets.
“Those forces do not disappear because the dollar has a strong fortnight.
“Periods of consolidation near highs are historically constructive. They allow leverage to reset, conviction to strengthen and long-term capital to establish positions.
“The dollar may be asserting itself today. Bitcoin is, arguably, asserting something bigger. Scarcity, adoption and credibility are doing the work beneath the surface.”
– Nigel Green, CEO, deVere Group
“Bitcoin remains locked in a tightening range, but the more important signal is emerging on the monthly timeframe. Bollinger Bands on the monthly chart are the tightest they have ever been, reflecting an extreme level of volatility compression. At the same time, Bitcoin continues to trade below the monthly basis line, with only days left before a monthly close that would confirm acceptance beneath it.
“Historically, sustained closes below the monthly Bollinger basis have often preceded capitulation-style moves in the months that follow. This does not guarantee immediate downside, but it reinforces the idea that time is being compressed rather than trend resolved. When volatility finally expands from these conditions, the resulting move has tended to be decisive — and markets rarely give ample warning once that expansion begins.
“Corporate crypto treasury strategies returned to focus after GameStop moved its entire 4,710 BTC treasury to an exchange this week. The Bitcoin was originally purchased in May 2025 for roughly $504 million, with the transfer valued closer to $421 million at the time, reflecting unrealized losses after a prolonged period of flat price action. While no liquidation has been confirmed, the move alone was enough to spark market speculation, underscoring how sensitive sentiment remains around corporate-held Bitcoin.
“The contrast with MicroStrategy is instructive. Where MicroStrategy has positioned Bitcoin as a long-duration strategic asset and embraced volatility as part of the thesis, GameStop’s move highlights the challenges faced by companies without the same conviction or balance-sheet flexibility. As more firms experiment with crypto exposure, the distinction between intentional, cycle-aware positioning and opportunistic treasury allocation is becoming clearer — and markets are increasingly quick to price in uncertainty when conviction appears weak.”
– Tony Severino, market analyst, YouHodler
“I wouldn’t be surprised if post-election run-up, if Bitcoin has been less volatile than NVIDIA.
“I don’t think that the price of Bitcoin fell from 120 to 84 because of fears of quantum computing. I think it fell because the narrative has died as a result of the liquidity not coming back into the cycle. I wouldn’t be surprised if it fell to 60 and went straight up from there. If I told you Bitcoin was going to be at a million in 10 years and you could buy it on sale… people run for the hills.”
– Abra founder and CEO Bill Barhydt
“Recent price action in Bitcoin has once again highlighted its character as a high-risk, highly volatile asset rather than a defensive store of value. Despite ongoing narratives positioning Bitcoin as ‘digital gold,’ market behavior over the past several days suggests that most traders and investors continue to treat it more like a technology stock, one that is sensitive to shifts in risk appetite, liquidity conditions, and broader equity market trends.
“The current decline in Bitcoin also mirrors the correction underway in U.S. technology stocks, though with noticeably higher volatility. As risk sentiment weakened across global markets, capital rotated away from growth-oriented and speculative assets, putting pressure on both tech equities and crypto. Bitcoin’s amplified moves relative to stocks reinforce its status as a high-beta asset, meaning it tends to outperform during rallies but also suffers deeper drawdowns during periods of stress.
“Beyond macro-driven selling, internal market dynamics have intensified the downside. A significant long squeeze has unfolded as prices moved lower, forcing overleveraged traders to close positions. This deleveraging process has accelerated sell-offs, as liquidations triggered additional downward pressure, creating a self-reinforcing cycle of volatility. Such events are typical in crypto markets, where leverage levels are often higher than in traditional asset classes.
“Another important source of selling pressure comes from corporate holders of Bitcoin. Over the past few years, a number of companies added BTC to their balance sheets, in many cases financing these purchases with borrowed capital. Given relatively high interest rates and borrowing costs, holding leveraged Bitcoin positions is quite expensive. At current price levels, some of these firms are facing tighter financial conditions, prompting them to reduce exposure or fully liquidate positions to preserve liquidity and manage balance-sheet risk.
“Taken together, these factors suggest that Bitcoin’s near-term performance remains closely tied to broader risk markets and financial conditions. While long-term narratives around scarcity and decentralization remain intact, short-term price behavior continues to be driven by macro trends, leverage dynamics, and institutional balance-sheet decisions. Until market volatility subsides and leverage is further reduced, Bitcoin is likely to continue trading in line with risk assets rather than behaving as a defensive hedge.”
– Ruslan Lienkha, chief of markets, YouHodler