Bitcoin’s market capitalization has plunged by over $1.1 trillion since its October 2026 peak, marking a severe bearish phase driven by liquidity drain. U.S. institutional investors have demonstrated clear disinterest, with billions exiting spot Bitcoin ETFs. The burden of demand now falls largely on retail investors, whose current buying power, while showing a potential stabilization pattern, remains historically low.
Bitcoin is experiencing one of its most bearish phases in recent months as market liquidity continues to evaporate. Approximately $1.163 trillion has been wiped from its market cap since its October peak of $2.515 trillion.
Institutional investors, particularly in the U.S., have shown clear disinterest since the start of the year. The negative Coinbase Premium Index, currently at -0.04, confirms U.S. investors have been distributing rather than accumulating Bitcoin relative to global markets.
NetFlow data shows U.S. spot Bitcoin exchange-traded funds have seen substantial outflows. Roughly $2.81 billion has exited these funds over the past two months, with $1.60 billion leaving in January and $1.21 billion flowing out month-to-date in February.
Analysis of activity on Binance reveals a pattern that hints at potential stabilization. The Binance Buying Power Index has fallen sharply to a historic low of -0.07 over the past 90 days, matching a level last seen in July 2024 when Bitcoin traded near $63,000.
After hitting this level in mid-2024, the price consolidated for roughly three months before rallying sharply. However, history also shows that deeper declines followed similar index lows in both 2022 and 2023.
Spot exchange netflow data from CoinGlass indicates recent activity has tilted slightly toward net buying, though the magnitude remains modest. Net spot purchases over the past three days total just $305 million, one of the weakest demand readings in recent months.
This suggests that while buyers remain active, their conviction and capital deployment are limited. Until average daily spot demand expands materially, Bitcoin’s price action is likely to remain fragile and highly sensitive to further institutional outflows.
