Bitcoin fell to a low of $60,000 after flashing a sell signal near $95,000, and was trading at $66,988 with a 1.75% daily loss and a 46% drawdown from its $126,000 peak. Key on-chain and market metrics, including a Sharpe Ratio of -38, an all-time high Stock to Flow Ratio rising from 127 to 261, and the MVRV Z Score dropping to $0.445, suggest a possible cycle bottom even as price consolidates between $65,000 and $70,000. Despite extreme bearish sentiment and weak market structure, heightened scarcity and historical patterns could set the stage for a future recovery if selling pressure eases.

Bitcoin has repeatedly failed to close above $70,000 and remained capped below that level, trading around $66,980 at the time of writing. According to analyst Sherlock, a rebound into $72,000 to $76,000 could be a bull trap, citing Strategy's 714,644 BTC at a $76,052 average cost and additional supply risks from spot ETF positioning.

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.