Bitcoin Is Falling Fast—But Is It a True Crypto Winter or a Normal Market Cycle?

Jakarta, Pintu News – Michael Burry, the investor who predicted the 2008 financial crisis, warned on Monday that Bitcoin’s sharp decline could trigger a wave of forced selling across asset classes.

With Bitcoin (BTC) already down 40% from its October peak and altcoins plummeting 20-40% since the January FOMC meeting, the big question now haunting the crypto market is whether crypto winter has truly arrived.

Michael Burry Warns Bitcoin Could Fall to $50,000

In a post on Substack, legendary investor Michael Burry – known for predicting the 2008 financial crisis in The Big Short – estimated that up to $1 billion in precious metal assets had been liquidated by the end of January, as institutional investors and corporate treasurers raced to recoup losses from crypto.

Read also: Bitcoin Price Slumps Again to $76,000 Today: What’s Next for BTC?

“There is no organic use case that can stop or slow down Bitcoin’s price decline,” Burry wrote.

He warned that if Bitcoin’s price falls to $50,000, crypto-mining companies could go bankrupt, and the market for token-based precious metal futures could “collapse like a black hole with no buyers.”

On Tuesday (3/2), Bitcoin briefly touched $73,000 – down 40% from its October peak of over $126,000. Burry argues that Bitcoin has failed to deliver on its promise as a digital hedge and gold alternative.

He sees the recent surge triggered by ETFs as merely speculative, not a sign of solid long-term adoption.

Strategy & BitMine: The Collapse of the Company’s Crypto Financial Model

Burry’s warning about the potential for financial contagion is reinforced by the real-world conditions of crypto treasury companies.

Strategy, the Bitcoin accumulation company led by Michael Saylor, is now losing money on paper after the price of BTC fell below their average purchase of around $76,000. In the fourth quarter alone, they recorded an unrealized loss of $17.44 billion.

Strategy’s market capitalization plummeted from $128 billion in July to $40 billion, down 61% since Bitcoin’s October price peak. The company’s mNAV (enterprise value compared to the value of its crypto holdings) also plummeted, from over 2 to just 1.1, approaching a critical threshold that could trigger a forced token sale.

The company has even hinted at the possibility of selling holdings if mNAV falls below 1 – a big change from Saylor’s famous “never sell” stance. In order to maintain the ability to pay dividends and debt, Strategy has raised $1.44 billion through share sales.

Meanwhile, BitMine Immersion Technologies, an Ethereum (ETH) accumulation company backed by Peter Thiel and chaired by Tom Lee of Fundstrat, is facing even bigger losses. They owned 4.3 million ETH at an average purchase price of $3,826, but the value has now dropped to around $2,300 – meaning unrealized losses of more than $6 billion.

Analysts warn that crypto treasury companies are now trapped by their own narrative. Any asset sale, even a small amount, can send a bad signal that triggers a fall in stock and token prices that is greater than the value of the sale itself.

Technical Analysis Suggests Prolonged Downtrend

Japanese analyst Hiroyuki Kato of CXR Engineering warns that the crypto market may have entered a long-term downward trend. Bitcoin has now broken the November low, which has triggered a shift in investor strategy – from abuy-the-dip pattern to a short-selling strategy.

Read also: Ethereum Under Pressure: Vitalik Buterin Moves 5,493 ETH, Trend Research Releases 20 Thousand ETH

Ethereum’s decline became even sharper after the price broke the important support level of 400,000 yen (about $2,600). Meanwhile, altcoins have also seen large declines of 20-40% since the FOMC meeting in January.

Kato noted that the weekly chart shows a head-and-shoulders pattern approaching the neckline. If this pattern is completely broken, then a short-term recovery will be structurally very difficult.

“High volatility in crypto and precious metals – which occurred earlier than the stock market – could be a ‘canary in the coal mine’,” Kato wrote, hinting that the market is risk-off and advising investors to wait until conditions stabilize again.

Not a Crypto Winter, But a New Paradigm

While many bearish signals are emerging, Tiger Research argues that the current market downturn is fundamentally different from previous crypto winters.

Winters of the past-such as the Mt. Gox in 2014, the ICO crash of 2018, and the collapse of Terra-FTX in 2022-were all triggered by internal industry failures that undermined trust and made many talents leave the ecosystem.

“We didn’t create spring, so winter doesn’t exist either,” the report states.

According to Tiger Research, both the price rally in early 2024 and the current decline were triggered by external factors such as ETF approval, tariff policies, and interest rate expectations-not failures from within the industry itself.

More importantly, the market has now been divided into three main layers following the introduction of regulation:

• Regulated zone – limited volatility, suitable for institutions.
• Unregulated zones – where speculation is high and risk is high.
• Shared infrastructure – such as stablecoins, which are used by both zones above.

The positive impact that used to spread to all tokens when Bitcoin rose (trickle-down effect), has now disappeared. Capital from ETFs now stays in Bitcoin and does not flow to altcoins as it did before.

“The crypto season where all assets rose together doesn’t seem to be repeating itself,” concludes Tiger Research. “The next big rally is coming. But not for everyone.”

For the rally to actually happen, there are two key conditions that must be met:

• The emergence of featured use cases from unregulated zones.
• Favorable global macroeconomic conditions.

Until those two things happen, the crypto market is currently in an unprecedented phase – not winter, not spring, but a unique new paradigm.

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Reference:

• BeInCrypto. Is This a Crypto Winter? Burry Says $50K, Tiger Says No. Accessed on February 4 , 2026