Bitcoin has dropped 8% in February and is on track for its first negative monthly return since February 2020. Currently priced at $93,948, the cryptocurrency has struggled to gain steady momentum after surpassing its previous all-time high of $74,000. Since breaking above $92,000 on Nov. 19, 2024, Bitcoin has spent 65 out of the last 97 days fluctuating between $92,000 and $100,000. Despite weak price action, Bitcoin’s realized market capitalization has increased by $160 billion in the past three months, signaling fresh capital inflows, according to Sina G, co-founder of 21st Capital.
While new capital has entered the market, network activity has significantly declined. Bitcoin researcher Axel Adler Jr. reported that daily transfer volume has dropped by 76%, with active wallets decreasing by 74% in the past week. However, long-term holders are holding onto their assets, as indicated by Coin Days Destroyed data hitting a multi-year low. This metric, which tracks older Bitcoin transactions, suggests that long-term investors are not selling despite market fluctuations.
Earlier this month, Bitcoin saw a sudden 11.3% drop from $102,000 to $91,100 within 48 hours. So far, it has managed to close a daily candle above $95,000 for the entirety of February, but this support level has been tested three times in the past week. Analysts warn that if Bitcoin falls below $95,000, it could break down further to $91,000 or lower, possibly revisiting the sub-$90,000 range.
Spot Bitcoin exchange-traded funds (ETFs) have also seen reduced investor interest, with $364 million in outflows recorded on Feb. 20. Additionally, Strategy's recent acquisition of 20,356 BTC did not trigger a short-term price recovery, furthering concerns about the current market outlook.
Bitcoin is up just 1.97% in 2025 so far, failing to make significant gains after reaching its new all-time high. With trading volume and active wallet activity declining, the market remains cautious. However, the $160 billion increase in realized capitalization suggests that new money continues to enter the market, even as prices remain under pressure.
