Bitcoin (BTC) and Ethereum (ETH) Are Set for Their Worst February in Years, Though Analysts Think the Bull Market Isn't Over

Bitcoin (BTC) and Ethereum (ETH) are set to wrap up a rough month, with BTC dropping over 7.8% to $86774.59 and ETH plunging 9.47% to $2403.

Bitcoin (BTC) and Ethereum (ETH) are setting up for their worst February in years, with both cryptocurrencies heading for a rough month. As of early Friday morning, BTC dropped over 7.8% to $86,774.59 and ETH plunged 9.47% to $2,403.

Should both close the month at current levels, it would be their worst February since 2017 and 2021, respectively. However, despite the downturn, voices in the crypto space aren't panicking. Many still see a long-term bull market in the making, though they're adjusting their expectations as the crypto cycles evolve.

Changing landscape of altcoins

Pseudonymous crypto trader Pentoshi believes the days of explosive altcoin rallies, like in 2017 and 2021, may be gone for good. "I think for alts, we will never see a run like 2017 / 2021 again. But I also said that previous to this run, I thought we'd never see a decent alt season again after 2017 (most alts still down 90% from ATH).")

"Now, pnde in 2021 went to 64k% gain (from 0.0001 to 0.064) and we saw triple digit gains on many alts. The space is just way too big now, with hundreds of millions of people where as there we really did start at 0 for defi and in 2017 all alts combined were 13B. We just started at such a high floor," the trader wrote on X, discussing the vast difference in starting capital.

"I also believe the next bubble won't even be in crypto, it’s likely going to be in Robotics/AI. 50% of the global GDP is labor, a 50T annual market as Kang pointed out. People get paid to use their time, but robots don't need to be paid to work 24/7."

While Pentoshi still sees opportunities in crypto, the trader emphasizes that the market is maturing and unrealistic expectations need to be adjusted.

"My final takeaway is that I’m not surprised people are getting bored of crypto after 18 months of sideways action. But I also think that people have lost perspective on how good things still are in crypto. Relative to other markets, crypto has performed exceptionally well during a time of macroeconomic hardship. We’re still very early in the grand scheme of things. Expecting 1000% gains on new coins every year is not realistic, and neither is expecting a rapid return to the ATHs we saw in 2021. As the market matures, we should expect smaller gains and a more gradual upward trend."

New bull market

Bitcoin's halving events have historically driven massive bull runs, but this time, things may be different. Pierre Rochard, vice president of research at Riot Platforms (NASDAQ:RIOT), sees a shift in how the market reacts.

"Historically, halvings dramatically reduced bitcoin’s new supply and sparked parabolic price increases. However, with each halving, the relative reduction in freshly minted bitcoin decreases, making this fourth halving a smaller shock to the market. This, coupled with changes in U.S. policy and increasing institutional interest, is setting the stage for a different kind of bitcoin bull market," Rochard said.

Instead of a rapid price surge, he expects a slower, more stable climb, “align[ing] with underlying demand, rather than the sharp run-ups and crashes of the past.”

Rochard also notes that changes in U.S. policy under President Donald Trump could provide a more favorable regulatory environment for Bitcoin.

"President Trump’s historic return to the White House is ushering in a new regulatory era for bitcoin, reversing the strict capital controls and compliance burdens previously placed on banks. This move opens up opportunities for institutions to engage more easily with bitcoin.”

This, coupled with increasing institutional interest, is helping solidify Bitcoin’s position in the traditional financial system, Rochard explains.

"From ETFs that wrap bitcoin exposure into a digestible format to large companies like MicroStrategy (NASDAQ:MSTR) that hold substantial reserves in BTC with intelligent leverage, the financial industry is recognizing bitcoin’s potential as an alternative asset. This, in turn, is driving further institutional capital into the space."

That said, Rochard acknowledges the risks, stating that “over-leveraged traders will continue to spark sudden liquidations, while macroeconomic events and pauses in demand inevitably cause periods of sideways price action and corrections within the bull run.”

Even so, he remains bullish in the long term, suggesting that “the long-term strategy for bitcoin remains ongoing accumulation. As institutions and individuals continue to allocate capital to bitcoin, we can