In late 2025, Bitcoin climbed to a record $125,000 before sliding to about $66,888, marking a drawdown of nearly 46% amid growing fear and weakening demand. By February 2026, network data, ETF flows and falling active addresses showed a market dominated by risk reduction and uncertainty rather than strong retail participation.

Bitcoin’s recent pullback has seen wallets holding 0.1–1 BTC steadily accumulate, boosting their balances by about 1.05% since the October price peak. In contrast, holders with 1–10 BTC have trimmed exposure to a 38‑month low, while SOPR data shows both long‑ and short‑term participants increasingly transacting near breakeven or at losses.

In Q4 2025, references to "AI disruption" on earnings calls surged to 126, triple the level a year earlier, while Bitcoin fell 24% even as Nvidia extended gains from a 39% jump in 2025. Analysts see this widening gap between Bitcoin and tech stocks, along with weakening confidence in the U.S. dollar, as a sign of growing AI-linked financial risk that could eventually support Bitcoin as a long-term hedge. Arthur Hayes argues that an AI-driven rotation out of crowded tech trades and into digital assets could be the trigger for new all-time highs.

Coinbase CEO Brian Armstrong told CNBC at the World Liberty Forum in Florida that the latest Bitcoin decline reflects market psychology and profit taking rather than weakening fundamentals. He called the move temporary and said Coinbase is repurchasing shares and adding BTC at lower prices, while on‑chain data indicates whales have accumulated more than 200,000 BTC.

Options data from laevitas.ch show two‑month BTC puts priced 13% above comparable calls on Thursday, signaling a defensive stance. Laevitas also tracked neutral‑to‑bearish strategies dominating Deribit in the past 48 hours, while Farside Investors reports $910 million in U.S.-listed spot ETF outflows since Feb. 11. BTC was rejected near $71,000 on Sunday yet held above $66,000 through the week.

Monthly Lightning Network volume reached an estimated $1.1 billion in November 2025 across 5.2 million transfers. The report notes 2025 transaction counts trail 2023’s peak of 6.6 million and projects new growth as individuals and businesses test AI-driven payment agents, alongside rising institutional use and a capacity of 5,606 BTC in December 2025.

Bitcoin is on track for a fifth straight red monthly candle, with this month down 15%, according to CoinGlass. Analysts note that 2018/19 saw six red months followed by over 316% gains in five months, while 2022 delivered four red quarters and a 64% annual drawdown. Others on X argue the current setup is structurally different.

Bitcoin’s monthly Bollinger Bands have compressed to their narrowest reading on record, a setup analysts associate with powerful follow-up moves. Some chartists highlight that similar volatility squeezes have historically preceded major rallies, although others point to a looming 50- and 200-period moving average death cross and elevated retail long positioning as downside risks. Additional on-chain data shows a deeply negative short-term Sharpe ratio and repeated profit-taking above $70,000, suggesting the market is approaching a key inflection zone.