8 Factors Affecting Crypto Markets

The narrative of failed blockchain adoption and feeble adoption has reduced confidence in major crypto projects.

A popular crypto analyst detailed a list of factors behind the current market downturn while also explaining long-term reasons for optimism.

The analysis, shared by Post Fiat founder Alex Good, also known as ‘goodalexander’ on February 3, 2026, comes as digital asset markets are experiencing their cheapest social sentiment in months and Bitcoin is trading near nine-month highs.

Splitting Current Decline

The industry watcher presented eight bearish factors for the current decline, the main reason being the failure of the big news of blockchain integration to generate sustainable value.

Examples include Arbitrum’s brief rally for the Robinhood announcement that later led to an internal settlement from the broker and Nasdaq’s use of private blockchains for on-chain trading instead of public.

The analyst noted that capturing the actual cost of major layer-1 deals was low, with Solana’s daily costs dropping to around $1 million from peaks of more than $24 million during the “Trump coin”.

Other factors include the macroeconomic focus on global stocks, gold, and AI, which has drawn attention away from crypto. Good also suggested that the market acted as a “proxy for Trump,” working well on expectations of a pro-crypto policy that never fully materialized.

In addition, the expert pointed to structural market pressures, suggesting that if discounts on digital asset trusts (DATs) increase, activist investors may be encouraged to sell underlying tokens, creating more downward pressure.

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The data supports this bearish view. According to market intelligence provider Santiment, “FUD has taken over social media” following Bitcoin’s 16% drop last week, which the company calls negative selling sentiment from November 2025.

The flow of investments also showed darkness, considering the data from CoinShares showed a weekly outflow of $ 1.7 billion from investment products of digital assets, with Bitcoin alone seeing an outflow of $ 1.32 billion. Additionally, since peaking in October 2025, the sector has lost less than $73 billion in assets.

What Can Support Crypto Long Term

Despite the selloff, Good said there are still reasons for cautious optimism. He pointed to a highly fragmented world order, rising debt, and the risk of wealth taxes as factors that could revive interest in fixed-supplier assets.

He also pointed out that artificial intelligence could lead to an increase in unemployment instead of job creation, increasing pressure on central banks to loosen policy, which has already benefited the rare commodity.

Some analysts disagreed with the view that the cycle is slowing rather than breaking. On February 2nd, the founder of Global Macro Investor, Raoul Pal, said that the decline of Bitcoin reflects the withdrawal of US funds tied to financial mechanics and government shutdowns, not a failed market structure. He pointed out that monetary easing later in the year could change conditions, although near-term momentum remains weak.

However, as things stand, traders will need to monitor whether Bitcoin can maintain its stability within the $70,000 range. According to market watchers such as Daan Crypto Trades, a sustained pullback above $80,000 could calm the markets, while further declines could test sentiment again.