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Bitcoin’s 50% Drop Tests Markets as Retail Investors Continue Dip Buying

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Bitcoin's 50% Drop Tests Markets as Retail Investors Continue Dip Buying


Retail investors on Coinbase continued buying dips through market volatility, even as warnings of a severe crypto winter emerged.

Since reaching a record high last October, Bitcoin has shed nearly half its value. As it continues to struggle below $70,000, the weakness is fueling fears of another crypto winter.

But despite the ongoing volatility in the market, retail activity on Coinbase has remained steady, according to Brian Armstrong.

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Post-October Slump

In a recent tweet, the Coinbase chief executive said that the platform data shows retail users have continued buying despite price dips as native unit holdings across Bitcoin and Ethereum increased. Armstrong added that a majority of retail customers held balances in February that were equal to or higher than their December levels, as participation from smaller investors on Coinbase remained steady.

While retail activity appears resilient, market commentator Mippo warned that the broader market outlook remains fragile. Mippo said current conditions point to the onset of a “full-on crypto winter,” which has the potential to match the severity of the 2022 bear market or even the downturn seen in 2019. He attributed the near-term pressure to the “air gap” created by previously unsustainable valuations alongside an evolving regulatory environment.

He stated that historical crypto valuations were largely driven by speculative capital flows rather than business fundamentals, as regulatory uncertainty made it difficult for projects to generate compliant revenue or cash flows. Prices were often set by how much capital chased a limited supply of tokens tied to the most popular narratives at the time, and higher-risk themes commanded higher valuations.

According to Mippo, this framework is now breaking down as regulatory pathways for crypto projects become clearer, beginning with stablecoins and expected to extend to a broader range of tokens.

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While he characterized this regulatory change as positive over the long term, Mippo said it creates challenges for projects whose valuations were built primarily on speculation. As compliant revenue generation becomes possible, he explained that market participants are increasingly focused on cash flows, which has led to a reassessment of token prices that were set too high under earlier assumptions. This helps explain why on-chain activity and fundamental usage may be growing even as token prices continue to decline, he added.

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Mippo also said crypto is being “absolutely mogged by AI,” while adding that the frenzy around meme coin speculation is catching up with the industry, and that crypto failed to build useful products during that period.

As such, he estimated the reset in valuations could continue for another nine to eighteen months before broader market conditions begin to improve.

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Crypto World

Will Bitcoin Price Drop to $50,000 by March 2026?

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Will Bitcoin Price Drop to $50,000 by March 2026?

Bitcoin is trading around $68,700, down nearly 22% year to date and on pace for its weakest first quarter since 2018. After starting the year near $87,700, BTC has shed almost $20,000 in just a few weeks, putting pressure on the broader crypto market.

While early-year weakness is not unusual for Bitcoin, the scale of the decline has raised concerns that the current correction may not be over yet.

Bitcoin Price Chart in 2026 So Far. Source: CoinCodex

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Worst First Quarter in 8 Years?

Historically, Bitcoin has posted a negative first quarter in 7 of the past 13 years. 

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However, a 22% drawdown would mark its worst Q1 performance since the 2018 bear market, when BTC plunged nearly 50% in the opening months of the year.

Bitcoin quarterly returns. Source: CoinGlass

January and February both closed in the red, increasing the likelihood of a rare back-to-back negative start. 

To meaningfully shift the narrative, Bitcoin would need to reclaim the $80,000 region, which currently appears distant given prevailing momentum.

That said, history shows that weak first quarters do not necessarily define the full year. In eight of the past thirteen years, Q2 delivered the opposite performance of Q1. 

This keeps the medium-term outlook more nuanced than the headlines suggest.

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9% Bounce May Have Increased Downside Risk

Between February 12 and February 15, Bitcoin staged a sharp 9% rebound. On the surface, the move appeared constructive. Underneath, leverage data tells a different story.

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Open interest in BTC futures jumped from roughly $19.6 billion to $21.47 billion during the rebound, an increase of nearly $1.9 billion. 

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Funding rates also turned strongly positive, signaling that traders were aggressively positioning for further upside.

Rising BTC leverage: Santiment

However, the broader chart structure still resembles a bear flag. The recent rally unfolded within a downward continuation pattern, and price is now drifting back toward the lower boundary of that structure.

Momentum indicators add to the caution. A hidden bearish divergence formed on the 12-hour chart, with price making a lower high while RSI printed a higher high. This pattern often appears when sellers are quietly regaining control.

At the same time, Bitcoin’s Net Unrealized Profit/Loss surged by roughly 90% over several days, indicating that many holders quickly returned to paper profits. 

Similar profit spikes in early February preceded a 14% drop. If traders rush to lock in gains again, selling pressure could accelerate.

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Key Levels: $66K Support, $58K Downside Target

Technically, the $66,270 area is a critical near-term support. A confirmed breakdown below this zone would activate the bear flag continuation pattern.

If that happens, the next major downside target sits near $58,800, aligning with the 0.618 Fibonacci retracement and representing roughly a 14% decline from current levels. 

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A deeper extension could bring the $55,600 region into play.

On the upside, BTC needs to reclaim $70,840 to stabilize short term. A stronger breakout above $79,290 would invalidate the bearish structure and signal that buyers have regained control.

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Bitcoin Dominance and Treasury Companies Offer Mixed Signals

Beyond price action, broader market metrics paint a complex picture. Bitcoin dominance remains elevated near 58.5%, suggesting capital continues to favor BTC over altcoins during this correction. That relative strength often appears in defensive market phases.

Meanwhile, public Bitcoin treasuries continue to hold substantial Bitcoin reserves. Data from BitcoinTreasuries shows over 1.13 million BTC collectively held by public firms, led by large corporate holders. 

The largest of these holders is Strategy, which holds 3.27% of the total Bitcoin supply. While this structural demand does not prevent short-term volatility, it reinforces Bitcoin’s long-term institutional footprint.

Bitcoin is caught between historical resilience and near-term technical weakness. 

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Bitcoin Dominance Over the Past Month. Source: CoinCodex

The 22% year-to-date drop puts Q1 on track for an unenviable record. 

Meanwhile, leverage, divergence signals, and on-chain profit metrics suggest that downside risk toward $58,000 cannot be ruled out.

At the same time, elevated dominance and continued corporate accumulation highlight that the broader structure is under pressure, but not yet broken.

The coming weeks will likely determine whether this is simply another rotational phase within a larger cycle or the start of a deeper corrective leg.

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Metaplanet Revenue Jumps 738% as Bitcoin Accounts for 95% of Income

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Metaplanet Revenue Jumps 738% as Bitcoin Accounts for 95% of Income

Japanese public company Metaplanet reported explosive revenue growth after pivoting its business around Bitcoin, with the cryptocurrency now accounting for most of its operating activity.

According to its fiscal year 2025 earnings report, revenue climbed to 8.9 billion Japanese yen ($58 million) from $7 million a year earlier, a 738% year-on-year increase. The surge followed the launch of the company’s Bitcoin (BTC) income operations.

“We launched the Bitcoin Income business in Q4 2024. Since then, this strategy has become our primary revenue source and is expected to remain a core driver of profit growth,” the company wrote.

A revenue breakdown shows about 95% of total income came from Bitcoin-related operations, largely generated through premium income from BTC options transactions. The company only began the segment in late 2024, replacing traditional business lines such as hotel and media activities as the core of its financial model.

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Metaplanet revenue surge. Source: Metaplanet

Related: Metaplanet sticks to Bitcoin buying plan as crypto sentiment hits 2022 lows

Bitcoin price drop pushes Metaplanet into loss

Operating profit reached about $40 million, but the company still posted a net loss of roughly $619 million. The loss stemmed from accounting rules. Since Metaplanet holds large Bitcoin reserves, it must reflect price swings on its financial statements, and a more than $664 million valuation drop erased the year’s operating income.

The company has aggressively accumulated Bitcoin amid the business shift. Holdings increased from 1,762 BTC at the end of 2024 to 35,102 BTC by the end of 2025, making it the largest corporate Bitcoin holder in Japan. The company has also raised more than $3.2 billion in capital since adopting its treasury strategy.

Metaplanet described its model as a long-term Bitcoin treasury approach, aiming to “acquire and hold Bitcoin permanently to hedge against fiat currency dilution and benefit from long-term value appreciation.”

The company expects growth to continue next year, forecasting revenue of about $104 million and operating profit of $74 million.

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Related: Metaplanet lifts 2026 revenue outlook despite $680M Bitcoin impairment

Metaplanet CEO reaffirms Bitcoin strategy despite market selloff

Earlier this month, Metaplanet CEO Simon Gerovich said the company will stick with its Bitcoin-focused approach even as the broader crypto market undergoes a sharp downturn. In a post on X, he stated there would be no shift in direction despite recent volatility.