Why Bitcoin Is Struggling: 8 Factors Impacting Crypto Markets

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Why <a href="https://bbg-news.com/btc-usd/">Bitcoin</a> Is Struggling: 8 Factors Impacting Crypto Markets

A leading crypto analyst has explained what’s causing the recent drop in prices, and also shared reasons to be hopeful about the future of the market.

I was reading an analysis from Alex Good, the founder of Post Fiat (he goes by ‘goodalexander’ online), and it came out on February 3, 2026. It’s hitting me hard because the crypto market feels really down right now – people are pretty negative online, and Bitcoin’s price is near a nine-month low. It’s definitely a tough time to be invested.

Dissecting the Current Downturn

As an analyst, I’ve identified eight key factors contributing to the current downturn. The biggest issue, in my view, is that the highly anticipated blockchain integrations haven’t delivered the long-term value we expected. Essentially, the hype didn’t translate into lasting results.

For instance, Arbitrum briefly increased in value after Robinhood announced it would list the token, but Robinhood ultimately built its own solution. Similarly, Nasdaq chose to use private blockchains for its on-chain trading system rather than public blockchains.

As a crypto investor, I’ve been watching fees on the big layer-1 blockchains, and it’s interesting to see how much they’ve dropped. Solana, for example, used to rake in over $24 million a day when that ‘Trump coin’ was popular, but now it’s down to around just $1 million. It really shows how much those short-term spikes can skew the numbers and how important it is to look at sustained fee capture.

Several things are impacting crypto right now. Investors are increasingly focusing on international stocks, gold, and artificial intelligence, which has lessened interest in cryptocurrencies. Additionally, the market seems to have reacted as if it expected more favorable crypto policies from recent political events, but those expectations haven’t fully come true.

The expert also explained that market forces could worsen the situation. If the price difference between digital asset trusts and the actual assets they hold increases, some investors might be motivated to sell those assets, potentially driving prices down further.

The recent drop in Bitcoin’s price is backed up by market data. Santiment, a market analysis firm, reports a surge in fear, uncertainty, and doubt (FUD) on social media after Bitcoin fell 16% in the last week. They say this is the most negative feeling among everyday investors since November 2025.

Investor confidence has waned, leading to significant outflows from digital asset investments. CoinShares data reveals a $1.7 billion decrease in weekly investments, with Bitcoin accounting for $1.32 billion of that loss. Overall, the digital asset sector has seen $73 billion in assets disappear since reaching its peak in October 2025.

What Could Still Support Crypto Longer Term

Even with the recent market downturn, I still see potential for some positive movement. I’m watching a few key things: the increasing instability in the global political landscape, the growing amount of national debt, and the possibility of new wealth taxes. These factors could drive investors back to assets with a limited supply, like certain commodities or cryptocurrencies, as a safe haven.

He also suggested that AI could cause more job losses than gains, potentially forcing central banks to lower interest rates. Historically, this type of policy shift tends to favor investments in limited or rare assets.

Several analysts agree that the current market downturn isn’t a fundamental failure, but rather a temporary strain on the usual cycle. Raoul Pal, founder of Global Macro Investor, recently explained that Bitcoin’s price drop is likely due to a decrease in available money in the U.S., connected to government funding issues and the possibility of a shutdown. He believes that if money becomes more readily available later in the year, things could improve, but for now, the downward trend is expected to continue.

Right now, traders are watching to see if Bitcoin can stay around the $75,000 to $80,000 level. Experts like Daan Crypto Trades believe that a solid climb back above $80,000 could reassure investors, but if the price falls again, it could worry them.

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2026-02-03 21:12