Bitcoin has plunged more than 50% from recent highs as rising interest rates, tightening liquidity and global economic uncertainty drive investors away from risk assets, reigniting fears of a prolonged crypto winter.
Last Updated: February 10, 2026 at 7:33 PM UTC +1
Published: February 10, 2026 at 7:24 PM UTC +1
Human Written Content
Human Written Content
The cryptocurrency market took one more step deeper into a long slide this week as the price of bitcoin sank more than 50 percent from a recent high last week, highlighting mounting investor fears over economic conditions clamping down and diminished risk awareness. Bitcoin, the world’s biggest digital asset across its market cap, dropped to around $60,000, becoming its steepest drawdown since the last major market cycle. The fallout has cascaded through the wider crypto ecosystem, taking hundreds of billions of dollars out of the market value of the sector and reigniting fears that the industry is suffering another full-blown “crypto winter.”
Market participants cite a combination of macroeconomic headwinds like persistently high interest rates, sticky inflation and uncertainty over global growth as the major factors behind the selloff — conditions that have increasingly shaped crypto behavior alongside traditional risk assets. Central banks are keeping tighter monetary policy, and speculative assets, like cryptocurrencies, have found it hard to bring in sustainable inflows.
The market for cryptocurrencies remains “very macro sensitive”, notes a digital asset strategist. “As liquidity tightens — and investors move to more safe assets — bitcoin reacts more quickly and aggressively to that pressure.”
“Bitcoin’s selloff echoes a broader lack of growth across risk markets: equity, stock markets, and other speculative assets are also hit by higher volatility, even as institutional exposure through regulated products continues to expand. The same patterns of rotation can be seen in other speculative stocks: Investors have been moving more and more to cash, bonds and defensive sectors and the way they view themselves are more comfortable with lower risk investments.
Ethereum, which is the second-largest cryptocurrency, has fallen too hard — more than 45 percent from its recent peaks. Smaller altcoins have been even worse, many smaller, liquid coin trading that have lost more than 60 percent to 80 percent of their value as liquidity drains and trading volumes dry up.
This downturn has led to a wave of forced liquidations among leveraged positions, driving losses lower as prices fall — a dynamic that consistently amplifies downside during periods of macro stress. Billions of dollars worth of long positions have been extinguished in the last few weeks, according to data from major exchanges, further amplifying downward momentum.
Macro fears are in the headlines. Critics, of course, argue that the current crypto winter, unlike earlier ones, is heavily correlated with broad macroeconomic activity.
“This selloff is not coming from one-dimensional events but rather a very dynamic structure driven by broader economic uncertainty rather than issues that have come over the short term so often in the past and are the result of either industry specific scandals or technology slumps.”
Worries about a slowdown in economic activity, geopolitical crises and the potential long-term implications of hawkish monetary policy have been a heavy drag on investor sentiment. Additionally, expectations that interest rates will remain higher for some time have dulled enthusiasm for non-yielding financial assets such as bitcoin.
"Bitcoin has increasingly traded as a macro asset," said another market analyst. "When real yields rise and liquidity tightens, it becomes much harder for crypto to sustain bullish momentum."
“The crypto industry has been hit hard by the market downturn itself, forcing companies and users alike to reassess risk, capital allocation, and exposure. Numerous exchanges, blockchain startups and crypto investment companies have made layoffs or reduced costs in recent months as revenues fall alongside trading activity. Venture capital investment for crypto projects is also greatly decelerating as investors are becoming more choosy and cautious. Funding volumes fell sharply from their peak around the last bull market- according to industry numbers.
Some long-term investors see the drop-off as a natural part of crypto’s boom-and-bust cycles, but the pullback is not necessarily a bad thing. This set of long-term bear markets has usually provided the basis for infrastructure builds and regulatory clarity, setting the stage for future expansion opportunities.
There is Still a Shown Detached Long-Term Outlook. And while sentiment in the short-term is weak, views on bitcoin’s long-term prospects are divided. Bulls argue that bitcoin’s fixed supply and increasing institutional awareness could eventually underpin a recovery once macro conditions improve. But bears say further downside could be on the horizon if economic conditions worsen or if the markets are subjected to different shocks.
For now, traders are probably paying close attention to high-level technical levels, and analysts will be trying to catch an insight on whether bitcoin can stabilize itself above important tech levels. A consistent break from near current levels could stimulate more sales; if any easing inflation or policy reversals come from central banks, it will be soothing.
While macro concerns remain the dominant story in the market, bitcoin’s performance is bound to the broad economic picture. For now, analysts say volatility will likely remain high in view of interest rates and worldwide expansion — further supporting the feeling that this crypto winter is not over.
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