Bitcoin's Bearish Slide: A Market in Flux
Bitcoin's price is on a downward trajectory, heading towards the $70,000 mark, and the on-chain data is painting a clear picture of a potential bear market. Traders are anticipating a hold from the Fed in April, and the market's behavior is raising some eyebrows.
Updated on February 5, 2026, at 2:36 a.m., this Asia Morning Briefing provides an insightful look at the crypto landscape. For a comprehensive overview of U.S. markets, CoinDesk's Crypto Daybook Americas is a must-read.
As the Asian trading day commences, Bitcoin's on-chain data is sending out strong bear signals. Prices are hovering around the mid-$70,000 range, and the global equity markets are in a state of flux. CryptoQuant's weekly report highlights a structural weakness, arguing that the market is not just digesting gains but facing a thinner buyer base and tighter liquidity.
Glassnode's data further reinforces this narrative, indicating weak spot volumes and a lack of sustained demand. The issue, it seems, is not panic but a lack of participation. Institutional flows also reflect this shift, with U.S. spot bitcoin ETFs, once net accumulators, now turning into net sellers. This shift has created a significant demand gap.
Additionally, the Coinbase premium has remained negative since October, suggesting that U.S. investors are not actively stepping in, even with lower prices. Historically, strong U.S. spot demand has been a key driver during bull phases, but that engine seems to have stalled.
But here's where it gets controversial... Liquidity conditions are also tightening. Stablecoin expansion, a key indicator of risk appetite and trading activity, has stalled, with USDT market cap growth turning negative for the first time since 2023. This indicates a potential shift in investor sentiment and trading behavior.
Long-term apparent demand growth has also collapsed from last year's highs, suggesting that this is not just about flushing out leverage but a broader fade in participation. Technically, Bitcoin remains below its 365-day moving average, with on-chain valuation bands indicating major support in the $70,000 to $60,000 range.
And this is the part most people miss... The macro backdrop is also intriguing. Bitcoin is increasingly behaving like high-beta software rather than the digital gold it was once known for. Prediction markets show traders leaning towards no change at the Federal Reserve's April meeting, with only modest expectations for a June rate cut. This hesitancy limits the potential for near-term liquidity relief.
The policy narrative takes an interesting turn with politics. President Donald Trump's recent remarks about his Fed nominee, Kevin Warsh, suggest a potential shift in central bank independence. During an interview with NBC News, Trump stated that a Fed chair who wanted to raise rates "would not have gotten the job," tempering earlier optimism.
For Asia, the market is defined by an absence of shock rather than its presence. Bounces are possible, but conviction remains thin. Market movements reflect this: BTC drifted lower into the mid-$70,000s, with rebounds fading quickly. ETH struggled to gain momentum, hovering just above the low $2,000s. Gold rebounded towards the $5,000 to $5,100 range, driven by safe-haven buying amid U.S.-Iran tensions and mixed economic signals.
In other crypto news, Binance denies issuing legal threats over insolvency allegations, and Multicoin Capital co-founder Kyle Samani steps down to pursue other tech ventures.
This article was generated with the assistance of AI tools and reviewed by our editorial team for accuracy and adherence to our standards.
