Photo by Dmitry Demidko on Unsplash
 

The rising wedge in Bitcoin broke hard. Expect another bear market.
 

Bitcoin weekly chart courtesy of Stockcharts.com, annotations by Mish
 

Bitcoin Technical Chart Analysis
 

• Rising wedge broke sharply lower, as expected.
• A head-and shoulder pattern formed, with a weak right shoulder.
• Bitcoin is right on support now at ~75,000.
• The implied target of a break is ~(75,000 – (126,000 – 75,000)) = ~25,000. There is long-term support at 25,000.
• There is intermediate support at ~54,000. I would expect a bounce there. But a drop to 54,000 would only be a 60 percent decline.
• An 80 percent or greater decline is more typical for a bitcoin bear market. That’s the 25,000 level again.
• An 87 percent decline, hardly unusual, would take bitcoin to 15,000.
   

📊 Bitcoin Market Cycles

💚 Bull Markets
Marked in green on the chart
Historically last over 1,000 days
Unfold within the long-term upward channel 🚀

🔴 Bear Markets
Marked in red on the chart
Historically last around 1 year ⏳
Sharp and fast corrections, but shorter than bull… pic.twitter.com/kVgg3EDO4t

— Crypto ₿ Mode (@KryptoTatko) February 2, 2026

Ten Key Bitcoin Fundamental Points
 

1. The bitcoin “Store of Value” trade has fundamentally broken in two. Unlike gold, which is mined with energy, but then remains “gold” regardless of how much mining energy is expended, bitcoin requires continual energy expenditure to maintain the bitcoin network.
2. Maintaining a digital ledger requires a constant injection of ordered energy.
3. The miners are currently doing the same amount of work for 27% less revenue. They have billions in sunk capex, and as long as bitcoin remains above the marginal cash cost of mining (~$85K), they will keep mining. This, in itself, is nothing new. It has always been the case that mining has periods of unprofitability.
4. The difference this time is that bitcoin miners are no longer using “surplus” energy.
5. AI datacenters pay 3-4x the revenue per kilowatt as bitcoin mining — and the miners are switching.
6. Another “halving” in 2028 will reduce revenue per hash by 50% unless the bitcoin price increases by 100%. 
7. The “Passive Bid” Has Diminished. For two years, the ETF complex provided a mindless, price-agnostic bid for bitcoin. That tap has slowed radically, and now bitcoin must find a new untapped bid.
8. Absent endogenous cash flows (e.g. earnings, transaction fee share, dividends), bitcoin has no stabilizing feedback loop—only reflexive ones. Further declines do not summon value buyers; they merely test the resilience of belief.
9. Bitcoin requires a massive, continuous calorie burn (electricity) just to prevent the network from collapsing. As energy prices rise (thanks to AI and the exhaustion of the 2010s surplus), the cost to maintain your “digital gold” rises.
10. Gold is chemically inert. It sits in a vault. Its maintenance cost is effectively zero and largely unaffected by existing value.

Did Bitcoin “Digital Gold” Just Become Fool’s Gold?
 

On January 11, I discussed Bitcoin fundamentals in Did Bitcoin “Digital Gold” Just Become Fool’s Gold?

Bitcoin miners have better things to do than mine Bitcoin.

Bitcoin is on support now. There is support below at 75,000 at 55,000 and 40,000. If those break, you are looking at 25,000.

Click on preceding link for discussion of the ten points.

Gold Weekly Chart
 

Today, gold finished today at 4,969.50. +316.90 +6.81%.

On a weekly closing basis, gold is very near an all-time high. The chart is parabolic, though. So, a stronger correction could be in the cards.

But the fundamentals of gold and Bitcoin at this point are hugely different.

Gold is a US dollar debasement trade and a no faith in the Fed trade. Bitcoin is neither, as evidenced by the Bitcoin chart itself.

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