Feb 10, 2026
By Proper Asset Management
For quite some time, we refrained from publishing regular market updates simply because nothing truly noteworthy was happening. After the turbulence of October and November 2025, December felt like a month of stagnation, characterized by a relatively narrow accumulation range. In January, however, volatility returned. It proved to be a demanding month operationally, while early February turned out to be even more eventful.
What Is Driving the Market?
What factors are currently shaping the market, and what should we expect in the coming months?
There are numerous theories attempting to explain both the broader decline in the crypto market and the specific sell-off observed on February 5. These range from geopolitical tensions in the Middle East to the prospect of new tariffs (hello, April 2025). Rather than speculating, we will focus on the most realistic and actionable drivers.
Decoupling: Crypto vs. U.S. Equities
The central theme of early 2026 has been the increasingly visible decoupling between the U.S. equity market and the crypto sector. While this divergence was already noticeable in November, it has become particularly pronounced this year.
It is important to recall that crypto assets tend to correlate far more closely with the technology sector—specifically companies within the Nasdaq 100—than with the broader S&P 500 index. Despite the near-total dominance of large technology companies within the S&P 500, the index as a whole has not become a sufficiently reliable benchmark for short-term positioning in Bitcoin or Ether. However, this is not the most important observation.
Trend Regimes and Correlations
There is a well-known trading maxim:
“In a bull market, all patterns resolve upward; in a bear market, downward.”
The meaning is straightforward: trend dictates behavior. The same price action pattern or commonly used indicator, such as RSI, can produce entirely different outcomes depending on the prevailing market phase. Although this concept originated in equity markets, it applies equally well to modern crypto trading. The same holds true for correlations.
When crypto assets are in a medium-term downtrend (not yet a long-term one), correlations tend to play out as follows:
Nasdaq 100 (or the broad market – S&P 500)
Higher High – Higher Low
Correction
Higher High – Higher Low
Bitcoin
Lower High – Lower Low
Bounce
Lower High – Lower Low
Flash crash
Bounce
Lower High – Lower Low
This is precisely the dynamic we have observed since early October 2025. U.S. equity indices continue to print new highs, while crypto assets trend lower—disappointing buyers who entered in the 110,000–120,000 range, discouraging altcoin holders, and reigniting anxiety around DAT companies (digital asset treasuries).
Institutional Fears and Market Psychology
One of the crypto market’s recurring fears is the idea that Strategy could be forced to liquidate its Bitcoin holdings. Smaller DAT companies have already faced this reality, particularly in January 2026. However, this concern is largely exaggerated.
Strategy is capable of withstanding a decline in Bitcoin’s price to as low as $10,000 per BTC without being forced to sell its holdings. While MSTR shares currently appear weak, similar episodes have occurred in the past and have not troubled professional market participants. Notably, many investment banks continue to rate MSTR as a Buy, with price targets roughly three times higher than current levels (approximately 400 versus a current price near 134).
Gold, Macro Signals, and Risk Regimes
Another widely discussed concern is the sustained rise in gold prices over recent months. This move reflects both inflationary pressures and hedging against the U.S. dollar’s role as the world’s primary reserve currency.
Importantly, rising gold alongside rising equity markets and a weakening dollar is characteristic of a risk-on environment. In a true risk-off regime, gold typically rises while equities fall and both the U.S. dollar and Japanese yen strengthen. For this reason, we do not interpret the current rally in gold as a precursor to a financial crisis. Rather, strong demand has pushed gold out of a multi-year accumulation range and into a revaluation phase.
Silver, which has risen even more aggressively than gold, deserves only brief mention. Its dynamics are largely speculative and resemble a classic market corner—something not uncommon in commodity futures. A correction of approximately 40% should be expected.
Bitcoin: From Euphoria Back to Reality
Returning to Bitcoin, from May through November the market operated under the assumption that prices above 100,000 represented a new structural reality. Levels around 98,000 were widely anticipated, while 90k was perceived as either an attractive entry point or a sign of severe breakdown.
Over time—through a combination of sharp sell-offs and slow, grinding declines—Bitcoin retraced to the September–October 2024 levels that preceded Trump’s election victory. This is highly symbolic, as Trump’s win acted both as the catalyst for the rally and, ultimately, as the source of subsequent disappointment.
Politics, Regulation, and Expectations
Trump’s election victory triggered widespread euphoria driven by expectations of a strategic BTC reserve, high-profile appointments, and regulatory initiatives such as the Clarity Act. In practice, the sequence unfolded differently: political instability was followed by normalization, which pushed Bitcoin to a new all-time high, and then by a gradual cooling driven not by negative developments, but by the absence of new positive catalysts.
The so-called strategic reserve amounted to a halt in Bitcoin sales rather than active purchases onto the Federal Reserve’s balance sheet. While the “crypto czar” achieved a formal softening of the SEC’s rhetoric toward blockchain and Web3 companies, small and mid-sized crypto-related businesses in the U.S. still face significant obstacles when attempting to open bank accounts.
The long-anticipated Clarity Act—once viewed as one of Bitcoin’s strongest potential catalysts—ran into substantial resistance from the banking sector. Chief among the concerns is stablecoin yield: it is difficult to justify 0.5% annual returns in dollars when basic DeFi strategies in stablecoins offer 4% or more. As a result, the legislation risks becoming largely procedural. Nevertheless, regardless of its final form, the passage of the Clarity Act would still represent a meaningful step toward government-level adoption by the world’s largest economy and should be positive for Bitcoin. Its signing is most likely in May.
Technical Context and the February 5 Move
Against this backdrop, the decline in Bitcoin’s price since November 2025 appears fundamentally justified and technically coherent. The impulse observed on February 5 resembles a classic exhaustion or completion phase of the broader move.
Price Scenarios and Expectations
We assign a medium probability to a new Bitcoin ATH in 2026. A 50% drawdown from the peak has already occurred—something many previously considered impossible. Historically, Bitcoin has experienced cyclical drawdowns of up to 70%, which would imply levels near 38,000.
Is such a scenario possible? Yes.
Is it a trading thesis? No.
The market structure has evolved significantly, and the traditional Bitcoin supercycle appears to be a relic of the past.
Our base case is moderate accumulation in the 64,000–75,000 range, followed by consolidation around 78–80k and a sharp move toward 88k, potentially as early as Q1 2026. Beyond that, the market may either extend toward 96–98k or remain locked in a broad 68–88 range throughout the summer.
Sustained trading below 60k is not part of our base scenario, though a retest of that level would necessitate a reassessment of trading strategies for the first half of 2026. Looking further ahead, there is a high probability of prices exceeding 100,000 in September–October. Only a decisive reclaim of that psychological level would fully restore crypto’s leadership status and attract renewed institutional inflows.
Until then, market attention is likely to remain focused on equities, AI, precious metals, and energy—anything but crypto—reflecting retail capitulation and the fact that institutions have already accumulated sufficient exposure.
ETH and SOL
ETH has shown surprising resilience. Its underperformance in 2025 and lack of hype resulted in a relatively modest drawdown. Historically, Ether declines much more sharply than Bitcoin; this time, losses were comparable. This may mark the early stages of ETH becoming a more mature and independent asset. While we do not expect explosive upside, ETH could outperform Bitcoin in a broad-range environment. Our stance remains long-only.
SOL, by contrast, currently lacks a clear catalyst. A new narrative—similar to the memecoin cycle—is required for meaningful outperformance. We expect a relatively quick reclaim of 100, followed by a range between 100–128 and a potential move toward 150 after accumulation. A genuine ATH discussion only becomes relevant after sustained consolidation above 160.
Final Thoughts
Overall, we expect 2026 to be volatile but not structurally bearish. The past four months may already have absorbed the bulk of bearish technical and fundamental pressures. A wide trading range with gradual upward bias remains the most probable—and most constructive—scenario.
These are precisely the conditions in which disciplined, active trading strategies tend to perform best.