The collapse of the stock market is dragging down the crypto sector as well, and Bitcoin accelerated its decline this week. From what I've seen in recent days, technology stocks and private equity firms are experiencing significant losses, indicating a serious liquidity problem in the economy. Bitcoin is currently hovering around $71,000 and is approaching the $74,600 low it hit last weekend.

The sell-off on Tuesday didn't just affect crypto. AI stocks, software companies, and private equity investment funds all lost between 6% and 12% in value. Ethereum dropped to $2,200, and Solana fell to $82. The iShares Technology ETF lost 14% in a week. Shares of giants like Blackstone, Ares Capital, and KKR fell sharply, especially. A recent announcement by BlackRock's private debt fund started to create a sense of despair across the market.

Bitwise's manager Matt Hougan said this isn't just a simple correction. According to him, this is a full-blown crypto winter, like in 2018 and 2022. But there is a bit of hope. Hougan noted that past bear markets usually lasted about 13 months. If this winter started in January, the crypto market could hit bottom within the next few weeks. Hougan emphasized that the feelings of despair and helplessness seen at the end of previous crypto winters are currently felt by the market, which could be a sign that the winter is nearing its end.

Shares of digital asset companies have also been affected by the overall market's sense of despair. Galaxy fell 18%, while Coinbase and Circle experienced losses between 5% and 7%. The market currently looks very weak both technically and sentimentally, but experts like Hougan believe this could be temporary. The points where despair peaks often signal a market turning point.