The crypto market remains in a risk-off environment with mixed signals, and understanding that divergence helps frame what you’re seeing. Bitcoin sits below major cyclical peaks, but after dropping toward $60K — the weakest since October 2024 — it bounced back above $70K, showing that extreme fear has triggered reflex buys amid ripples in traditional risk assets.
Sentiment, however, is still deeply bearish. The Fear & Greed Index sits near extreme fear (~5–8/100), highlighting panic selling and liquidation cascades. Retail has been in full panic mode, recording realized losses and heavy liquidations, while spot ETF inflows — including $330M on Feb 7 — show institutions selectively accumulating. This retail fear vs. smart money demand divergence is classic in deep corrective phases and often precedes base formation rather than breakdown.
Ethereum hasn’t escaped the drag, sliding with $BTC , though fundamentals remain intact. On-chain data shows whale accumulation and large selective buys as $ETH tests lower support.
In cycle terms, this is more a liquidity and sentiment reset than collapse. Extended downtrends compress volatility and flush weak hands before conviction returns — the pattern we’re seeing now. Into late February, expect BTC roughly between $60K–$78K, with ETH tracking lower liquidity zones but supported by structural demand.
This isn’t an “instant moon” scenario, it’s real money acting while fear dominates, the kind of environment where cycles turn slowly, not abruptly.
