By mid-February 2026, Bitcoin [BTC] has entered a highly unstable phase, with sharp swings in price and mixed signals from the market.
Although Bitcoin has recovered to about $70,318, gaining 2.23% in one day, it is still down by 26% in the past month, showing how severe the recent drop has been.
This fall has pushed the Crypto Fear and Greed Index to 13, a level called “Extreme Fear,” which reflects strong panic among investors.
Despite this fear, Bitcoin is still dominating the crypto market, holding nearly 59% of the total market value.
Mixed Bitcoin dynamics
At the same time, large investors are slowly returning.
After big money flowed out earlier in the week, spot Bitcoin ETFs saw $15.1 million in new inflows on 13th February, suggesting that institutions may be buying again.
On the technical side, Bitcoin’s network is also changing. For the first time in years, both mining difficulty and hashrate are falling.
This means some miners are shutting down because rising costs and lower prices are making it hard to stay profitable. This phase is often called miner capitulation.
Overall, the market is caught between fear from small investors and quiet buying from big players.
While short-term charts still show uncertainty, major Wall Street banks are now focusing on long-term buying rather than short-term price moves.
J.P. Morgan’s long-term bet
Seeing the current market dynamics, J.P. Morgan has lowered Bitcoin’s estimated “price floor” (the cost to produce one Bitcoin) from $90,000 to $77,000.
This change happened mainly because mining difficulty fell by about 15%, many high-cost mining operations shut down, and severe winter storms in the U.S., especially in Texas, disrupted mining activity.
Yet, despite these challenges and adjustments, J.P. Morgan expects Bitcoin to reach $266,000 in 2026.
This confidence is based on hopes that the CLARITY Act will pass, making it easier for large institutions to invest in crypto.
This followed the bank’s building its own crypto systems. Through its Kinexys unit, it is expanding its digital dollar token and preparing to offer crypto custody services for Bitcoin and Ethereum.
Additionally, Goldman Sachs, which once criticized Bitcoin, has now also added major digital assets to its portfolio.
What does this mean for investors?
All this is because the banks believe new regulations will make crypto safer and more attractive for large investors.
Interestingly, the Donald Trump administration is strongly supporting the CLARITY Act.
Patrick Witt, who works with the White House on digital assets, said the goal is to pass the law before the November 2026 midterm elections.
However, the bill is moving slowly in the Senate.
Now, whether the CLARITY Act passes soon or later in 2026, crypto in the U.S. is moving away from a wild west phase and toward a more regulated, bank-supported system.
Final Summary
- Bitcoin is going through a major test phase, with high volatility and strong fear among small investors.
- Falling mining difficulty and hashrate point to miner capitulation, which often happens during major market resets.
