After a red-hot January that saw Bitcoin surge more than 40% and reclaim the $23,000 level for the first time in months, the leading cryptocurrency hit a speed bump in early February 2023. As Sunday trading wrapped up on February 5, BTC was changing hands around $22,955, down roughly 5% over the previous seven days. The broader crypto market capitalization also contracted by about 4%, dipping to approximately $1.08 trillion.
TL;DR
- Bitcoin fell below $23,000 after a strong January rally that delivered 40%+ gains
- Total crypto market cap dropped ~4% to around $1.08 trillion
- Altcoins hit harder: Aptos -25%, Optimism -20%, Avalanche -16%, Dogecoin -11%
- Market strategist Gareth Soloway warns BTC could drop to $12,000-$13,000 without Fed support
- On-chain metrics remain bullish: Bitcoin addresses with non-zero balances hit all-time high
A January to Remember, A February to Forget?
Bitcoin’s January performance was nothing short of remarkable. The world’s largest cryptocurrency rallied over 38% in just 30 days, driven by a combination of improving macro sentiment and the Federal Reserve’s acknowledgment that disinflation had begun. For a market that had been battered throughout 2022 — with the collapse of FTX, Terra, and numerous other entities — the January rebound felt like a long-awaited relief rally.
But February brought a dose of reality. BTC slipped below $23,000 on February 5, trading at approximately $22,955 per CoinMarketCap data. Ethereum followed suit, trading at $1,631 with a 24-hour decline of around 2.1%. The total cryptocurrency market capitalization stood at roughly $1.08 trillion, with Bitcoin dominance holding firm at 60.7%.
Altcoins Take the Brunt
While Bitcoin’s 5% weekly decline was notable, several altcoins experienced significantly steeper losses over the same period. Aptos led the losers with a 25% decline, followed by Optimism at -20% and Avalanche at -16%. Decentraland shed 15%, Monero dropped 12%, and Dogecoin fell 11%.
However, not every token was painted red. The AI-crypto crossover narrative was beginning to take hold, with SingularityNET (AGIX) surging an extraordinary 113% in the same seven-day window. The Graph (GNT) added 50%, and ImmutableX climbed 10%. Lido DAO (LDO), Polygon (MATIC), and Basic Attention Token (BAT) also posted gains, suggesting that select narratives were still attracting capital even as the broader market pulled back.
Strategist Sounds Alarm on Bitcoin’s Long-Term Outlook
Gareth Soloway, president and chief market strategist at inthemoneystocks.com, offered a starkly bearish take on Bitcoin’s prospects in a February 5 interview with Kitco News. Despite acknowledging BTC’s impressive January bounce, Soloway argued that the cryptocurrency remained in an overall downtrend, still down more than 65% from its all-time high.
“I would daresay that without the Fed’s printing of money, bitcoin is headed towards twelve to thirteen thousand, and maybe as low as $9,000,” Soloway said. He predicted that the Federal Reserve would not cut interest rates until a “massively nasty recession” occurred, which he saw as a headwind for risk assets including crypto.
Not all analysts shared Soloway’s pessimism. Bloomberg Intelligence commodity analyst Mike McGlone maintained his bullish stance, predicting that Bitcoin would outperform most asset classes in 2023. Meanwhile, Robert Kiyosaki, author of Rich Dad Poor Dad, forecast gold reaching $3,800 per ounce and silver hitting $75 — though his views on crypto were more nuanced.
On-Chain Signals Tell a Different Story
While price action in early February was undeniably bearish, several on-chain metrics painted a more optimistic picture. According to Glassnode data, the number of Bitcoin addresses with a non-zero balance reached a new all-time high around February 5. This milestone suggested that retail accumulation was continuing despite the price pullback — a pattern often seen during market consolidation phases before the next leg up.
Furthermore, data showed that over one million BTC had left centralized cryptocurrency exchanges since 2020. This trend of coins moving off exchanges is typically interpreted as a bullish signal, as it reduces the available supply for selling and indicates that holders are moving their assets to cold storage for long-term safekeeping.
Why This Matters
The tension between Bitcoin’s strong January rally and its February pullback highlighted a market in transition. On one hand, macro conditions were improving — the Fed had acknowledged disinflation, and risk appetite was slowly returning. On the other, regulatory headwinds were intensifying, with the SEC ramping up enforcement actions against major crypto companies including Kraken and Genesis. The divergence between bearish price action and bullish on-chain metrics suggested that while short-term traders were taking profits, long-term holders were quietly accumulating. For investors, the key question was whether the January rally marked the beginning of a new bull market or simply a dead-cat bounce in a prolonged bear cycle. The answer would depend heavily on the Federal Reserve’s next moves and whether regulatory pressure would continue to intensify throughout 2023.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.
gareth soloway has been calling for 12k btc since like 2021, dudes a permabear at this point
40% in January and people are already panicking over a 5% pullback. Classic crypto.
non-zero balances at ATH while price dumps is actually one of the most bullish signals imo. people are accumulating, not selling
aptos down 25% lmao, that token has been nothing but downhill since launch