As Bitcoin (BTC) continues to fall below $70,000 (USD), on-chain analyst Willy Wu issued a warning on February 18, 2026. “Bad news for eternal bulls: Bitcoin continues to strengthen its bearish trend,” he wrote on his X account.
One of the indicators that supports that diagnosis is price fluctuations, which allow us to detect possible changes in the trend. For Mr. Wu, Bitcoin We will enter a bear market in 2026 “When volatility spikes rapidly.”
Since then, volatility has continued to rise, as seen in the chart below, “which means the bearish trend is increasing,” he stressed. However, for now, we have not reached the maximum levels of volatility seen in the crypto winters of 2015, 2018, and 2022.
Peak volatility typically occurs in the middle or late stages of a bear market, at which point the trend begins to weaken. “Usually you see a second or third small peak in the macro background. These peaks reflect surrender,” Wu said.
Three phases of the Bitcoin bear market
The analyst emphasized that volatility is just one aspect of evaluating the market. Another factor he values is following liquidity flows, which supports his bearish analysis. In his opinion, from this perspective, it is useful to divide the BTC bear market into three stages.
Phase 1 corresponds to the beginning when “Bitcoin’s liquidity has already deteriorated (this happened in the third quarter of 2025) and the price starts to fall.” Wu argues that Bitcoin is “illiquidity sensitive” because it is a relatively small asset compared to other assets such as gold. Therefore, he explains: There is a tendency to predict a global macro bear market.“It often lasts several months.”
In other words, when you spend your money wisely (smart money) Bitcoin reacts immediately when you withdraw your capital. That money may also flow out of stocks, but the movement won’t be reflected immediately. At this stage, standing bulls will blindly say this is a correction within a broader bull market, but they will not provide hard evidence of capital inflows, only stories.
Willy Wu, technical analyst.
According to Wu, Phase 2 will occur when global stock prices also enter a downward trend.. This is a huge sector worth $100 trillion, so it moves more slowly than Bitcoin, which currently has a market cap of $1.3 trillion.
For Wu, that scenario corresponds to the mid-stage of the BTC bear market. While there is “no longer any doubt” that a bear market exists, it is characterized by an overall decline in risk assets.
Phase 3 represents the “light at the end of the tunnel.” Analysts say investors will gradually return while liquidity begins to recover and capital outflows peak and stabilize.
“At this stage, prices typically fall before or a little after the peak exit,” he said. According to analysts, Bitcoin is still far from this point..
“Under this bear market framework, BTC is currently in Phase 1 and approaching Phase 2,” Wu clarified. This is reflected in the downtrend in relation to technology stocks, unlike other stocks that hit all-time highs this year.
analysis in observation
Wu’s foresight Both positive opinions and questions arose.. Expressing skepticism about his bearish view, the maximalist known as Zynx asked, “Didn’t you predict that Bitcoin would reach $200,000 to $300,000 in 2021?”
Mr. Wu answered, “Yes, 100%. What has changed is the influence of the derivatives market. 2021 was the first cycle where paper trading (Editor’s note: refers to Bitcoin derivatives, ETFs, etc.) was heavily involved. The key was to introduce a model that extends from on-chain to derivatives.”
In that sense, Wu acknowledged that such predictions were wrong, but defended his analytical approach and looking at it separately. “That was a mistake, but the worse mistake was bringing it up as if it invalidated all analysis. Any intelligent person would look for flaws in the argument to invalidate the paper.”
These comments came days after analysts noted that: Current market weakness is also related to quantum computing. With the development of such technology, it will be possible to decrypt the private keys of wallets in the future. That’s why efforts are underway to reduce that possibility.
Against this background, we expect the bear market to intensify over the medium term. However, he remains bullish on Bitcoin over the long term due to its scarcity and expectations that it will become more resilient to quantum computing.
This view is also consistent with the historical patterns that the market has had. As reported by CriptoNoticias, the currency always sees the end of its bullish cycle the year after a halving, and has since fallen by around 80%.
Bitcoin is currently trading 45% below its all-time high of $126,000, set in October 2025, a year after the most recent halving. In this sense, adjustments may continue depending on past trends.
