Bitcoin’s 50% Decline Seen as ‘Modest,’ Signals Market Maturity

Bitcoin (BTC) fell to about $60,000 on February 5 after sliding roughly 50% from its peak near $126,000, according to the latest market note from Binance’s research arm.

The report argues that, compared with prior cycles, the scale and structure of the decline suggest a market shaped more by institutional capital and macro forces than retail speculation.

Drawdown Data and Macro Forces Shaping the Slide

In a post published February 13, Binance Research wrote that the current 50% pullback “represents a modest correction relative to prior cycles,” noting that BTC has logged nine separate drawdowns of that magnitude or larger.

Historical examples listed by the firm include two separate falls of 94% in 2010 and 2011, a 78% dip between November 2021 and November 2022, and an 84% collapse during the 2017 to 2018 bear market.

The report attributed the present decline to macro conditions rather than crypto-specific failures, pointing to firm labor data and policy uncertainty tied to the Federal Reserve as factors that have kept liquidity tight and reduced appetite for risk assets. The researchers added that capital has rotated toward AI-linked equities and defensive sectors, leaving digital assets competing for investor attention.

Price data from CoinGecko shows Bitcoin trading less than 200 bucks below $67,000 at publication time, with the asset barely budging in 24 hours but gaining about 3% over the past week. Momentum is also weak across longer timeframes, with losses of about 19% in two weeks and nearly 30% in a month.

According to Binance Research, altcoins have lagged more sharply, with capital concentrating in large assets. The analysts linked that shift to a crowded token market after more than 11 million new tokens launched in 2025, many of which are no longer actively trading.

Structural Signals Suggest a Different Cycle Profile

Not all indicators paint the same picture, especially considering that analysis from Alphractal reported that Bitcoin’s long-term Realized Cap Impulse has turned negative for the first time in three years. This is a signal that has historically coincided with extended downturns as capital inflows slowed. The firm’s founder, Joao Wedson, said institutional buying and ETF accumulation have not fully offset supply pressure.

Macro uncertainty may also be contributing, with data from CryptoQuant showing its Global Uncertainty Index at a record level, higher than readings during events such as the 2008 financial crisis and the COVID-19 period. Elevated uncertainty often leads investors to reduce exposure to volatile assets.

However, Binance’s researchers argue that structural participation has deepened. They cited steady assets under management in spot Bitcoin ETFs, stablecoin supply near cycle highs, and rising interest in tokenized real-world assets. One example came this week when BlackRock settled trades for its tokenized Treasury fund through Uniswap infrastructure, a sign that traditional finance firms are still testing blockchain settlement rails.

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