Crypto Market Keeps Falling — Is 2026 on Track to Be the Worst Year Yet?
Jakarta, Pintu News – The crypto market started 2026 with a sharp decline that wiped billions of value off major digital assets. Since January, widespread profit-taking and macroeconomic pressures have driven the price of Bitcoin and altcoins down, sparking extreme fear among traders.
Currently, Bitcoin is trading at $70,553, down 24% in the past month.
Crypto Market Metrics Point to a Bad Start in 2026
The crypto market started the year with a total capitalization of around $2.95 trillion, but has now fallen to around $2.54 trillion. This decline reflects a write-down of approximately $410 billion since the beginning of the year, as “risk-off” sentiment spread across markets.
Read also: Bitwise CIO Claims Crypto Winter Has Started Since 2025: The Question, When Will It End?
The Crypto Fear and Greed Index dropped to an extreme fear level of 14 – close to the 2025 low of 10. This sharp drop coincided with Bitcoin breaking through an important support zone, causing general market sentiment to deteriorate.
Bitcoin’s decline has also erased the gains made after Donald Trump’s election victory. The asset reached an all-time high of $126,080 in October 2025, but has now fallen about 40% from its peak.
According to a report by Glassnode, 44% of Bitcoin’s supply is currentlyunderwater. At the same time, the amount of supply still making a profit plummeted from 78% to just 56%, indicating that many buyers at peak prices are now making losses.
The selling pressure intensified when the price of Bitcoin fell below $76,000 – which is the average price at which Strategy companies buy Bitcoin. This decline has also caused MSTR’s share price to weaken in recent days.
Overall, this triggered liquidations of around $2.56 billion in recent days, exacerbating downward pressure on prices.
Tax Report Surprise Adds Pressure
In addition to price movements, regulatory and compliance developments are also increasingly adding to the burden for crypto traders. Analyst Lark Davis warns that the IRS (US tax authority) will increase scrutiny in 2026 through new reporting requirements.
According to Davis, crypto exchanges in the US such as Coinbase, Kraken, and others will report digital asset sales directly to the IRS using a new form called 1099-DA. This means that users’ trading data will be sent directly to the tax authorities.
He also emphasized that traders must still calculate and prove the cost basis for each of their transactions. Davis added that crypto-to-crypto swaps are also considered taxable events – a fact that is still often misunderstood by many traders.
Meanwhile, QCP Broadcast reported that Bitcoin’s positioning has seen a reduction in risk during this downturn, with open interest shrinking and funding rates turning negative.
Read also: Donald Trump Passes $1.2 Trillion Budget, US Government Shutdown Officially Ends!
Bitwise CIO’s take on the “Crypto Winter”
Matt Hougan, CIO of Bitwise, stated that the crypto market has been in “full winter” since January 2025. He highlighted Bitcoin’s 39% price drop from its October peak, as well as Ethereum’s even deeper 53% drop.
Hougan explained that institutional buying through ETFs and digital asset treasuries briefly disguised a wider breakdown in the market. According to him, ETFs and institutional buyers had bought more than 744,000 Bitcoins worth about $75 billion during the period.
He also highlighted the sharp performance gap between assets that have institutional demand and those that do not. Over the course of 2025, Bitcoin, Ethereum , and XRP prices fell by around 10% to 20%, while non-institutionally-backed tokens plummeted by more than 60%.
However, Hougan notes that the “crypto winter” typically lasts about 13 months from peak to trough. Based on the timeline starting January 2025, he mentioned that the market may already be nearing the end of that historical duration.
He also added that in the final phase of a downturn, markets often ignore regulatory and adoption news, and generally, crypto winters end due to market fatigue, not euphoria.
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*Disclaimer
This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.
Reference:
- Coingape. Crypto Market Continues to Plunge, Could 2026 Be the Worst Year? Accessed on February 5, 2026
