Bitcoin’s latest drop may feel familiar, but according to Bitwise CIO Matt Hougan, the current downturn is less about a dramatic collapse and more about psychology reinforcing history.
In a series of February 2026 posts and interviews, Hougan argued that the ongoing “bear market” is largely a self-fulfilling outcome of the widely accepted four-year cycle narrative. Investors expect weakness after each halving-driven boom, so they position defensively – and that expectation alone helps create the downturn.
His view contrasts with popular technical commentary, including recent analysis by Merlijn The Trader, who pointed to a repeating post-breakdown structure with $77,000-$78,000 acting as a decisive resistance zone.
But while technical traders focus on short-term levels, Hougan is zooming out to the long-term prospects shaping the market.
Hougan described the current retracement as “villain-less.” In past downturns, crypto markets had clear triggers – the ICO collapse in 2018, then the Terra Luna collapse, followed by the shutdown of one of the top crypto exchanges at the time – FTX. In 2026, however, there is no singular catastrophic event.
Instead, he argues that retail investors sell because they believe the cycle demands it. That collective positioning creates downward momentum, reinforcing the narrative.
Additionally, Capital rotation into gold and artificial intelligence stocks has pulled liquidity away from digital assets. At the same time, macro uncertainty – including debate over quantum computing risks to encryption, geopolitical conflict, and the new Federal Reserve Chair’s stance have amplified risk aversion.
Despite labeling the current environment a “classic crypto winter,” Hougan stressed that it is fundamentally different from prior bear markets.
In 2018, the ecosystem lacked real-world applications. In 2022, regulatory hostility and major corporate collapses created existential fears. Today, he notes, the industry operates a stablecoin market that is projected to hit $3 trillion by 2030 and significant institutional engagement from asset managers such as BlackRock and Apollo.
In his view, the infrastructure underpinning digital assets is stronger than ever. That resilience suggests the present downturn is cyclical rather than structural.
Hougan expects Bitcoin to trade in a broad $75,000 to $100,000 range during the first half of 2026. Rather than a dramatic capitulation event, he sees a rounding bottom forming – a gradual base-building process signaling exhaustion of selling pressure.
He also suggested that the current crypto winter effectively began in January 2025. Historically, downturns tied to the four-year cycle have lasted about 13 months. If that pattern holds, the bottoming process may be nearing completion, leading to renewed buying pressure and a bullish run.
Looking further ahead, Hougan believes Bitcoin could ultimately break from its traditional four-year cycle by reaching new all-time highs later in 2026. He points to growing institutional adoption, including platforms such as Morgan Stanley and Merrill Lynch, as potential catalysts for renewed upside momentum. And those are just some of the names in a growing list of institutions embracing crypto and blockchain technology.
Hougan maintains an aggressive long-term outlook, projecting a 20-year target of $6.5 million per Bitcoin. His thesis centers on persistent global debt surge and long-term currency debasement, trends he believes will drive demand for scarce digital assets.
For now, however, the focus remains on whether Bitcoin can stabilize above key technical levels and complete the rounding bottom he describes. If the four-year cycle narrative truly is self-fulfilling, the next phase may depend less on fear and more on whether institutions step in decisively once the selling pressure fades.
