Bitcoin Faces Downward Pressure Amid Regulatory Shifts and ETF Market Evolution
TORONTO, February 1, 2026 – The cryptocurrency market enters February under a cloud of selling pressure, with Bitcoin (BTC) trading below the $90,000 CAD mark after a significant retreat from recent highs. This price action coincides with notable regulatory clarifications from both Canadian and US securities watchdogs, setting the stage for a pivotal year for digital asset investment vehicles.
Recent Market Volatility Tests Key Supports
Bitcoin has experienced a pronounced pullback over the past week, shedding approximately 15% from its monthly peak. As of the latest data, the leading cryptocurrency is struggling to hold support above $86,000 USD ($115,000 CAD approx.), having closed the previous week near $86,588 USD. Technical analysts are closely monitoring several key price levels, with a decisive break below $84,000 USD potentially accelerating declines. On-chain data points to the average cost basis for buyers who entered the market in 2024 at approximately $82,713 USD, a level that may serve as a significant psychological and technical support zone.
This downturn follows a disappointing 2025 for Bitcoin bulls, where extreme volatility culminated in a yearly loss of over 5%. The current correction has also impacted mining activity, with publicly listed miners reporting their steepest production decline since May 2024 on a 30-day rolling basis.
Key Bitcoin Price Levels & Support
| Level (USD) | Significance |
|---|---|
| $94,263 | Key resistance; bulls remain vulnerable below this level. |
| $87,000 | Recent support level lost; current trading zone. |
| $84,000 | Critical support; a break below could fuel further declines. |
| $82,713 | 2024 buyer average cost basis (on-chain). |
| $74,000 & $53,000 | Analyst-cited medium and extreme downside targets. |
Regulatory Landscape Evolves in Canada and Abroad
Concurrent with market movements, regulatory bodies have been active. The Canadian Securities Administrators (CSA) have finalised a package of amendments to modernise the continuous disclosure regime for investment funds, a move that impacts crypto-based products. Separately, staff from the US Securities and Exchange Commission (SEC) recently clarified that tokenising a security on a blockchain does not remove its status under federal securities laws.
In Canada, the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organisation (CIRO) continue to provide guidance on compliance, with CIRO outlining processes for obtaining trading exemptions or rule interpretations. A report from the C.D. Howe Institute emphasised that the window is closing for Canada to shape a coherent framework for stablecoins and digital payments, noting they have so far been regulated through securities frameworks.
ETF Market Developments and Cautionary Notes
The Exchange-Traded Fund (ETF) ecosystem for digital assets continues to evolve. While Canada was a pioneer with the world’s first Bitcoin ETF in 2021, the market is seeing consolidation and scrutiny. Emerge Canada Inc. recently liquidated 11 ETFs that had been under a cease-trade order since April 2024 without yet repaying millions in receivables, highlighting operational risks.
Analysts are advising selectivity, with some publications listing specific Bitcoin ETFs to avoid and one to watch in 2026. Despite recent volatility, industry voices like Bitwise CIO Matt Hougan argue for cryptocurrency’s place in a diversified portfolio. Globally, Japan’s crypto ETF timeline faces delays, while Hong Kong, Australia, and the United States have all approved various crypto ETF products in recent years.
Frequently Asked Questions
Why is the price of Bitcoin going down?
Bitcoin is experiencing a technical correction after its recent rally, with analysts pointing to a break below key support levels around $87,000 USD. Broader market sentiment, profit-taking, and macroeconomic factors often contribute to such pullbacks in the volatile crypto asset class.
What are the recent regulatory changes in Canada?
The Canadian Securities Administrators (CSA) have modernised rules for investment fund continuous disclosure. This update aims to provide clearer guidelines for all funds, including those with exposure to crypto assets, ensuring better transparency for investors.
Are Bitcoin ETFs a safe investment?
Like any investment, Bitcoin ETFs carry risk, primarily tied to the volatility of the underlying asset (Bitcoin). They offer a regulated way to gain exposure without holding the cryptocurrency directly. Investors should conduct due diligence, understand the specific fund’s structure and fees, and consider their own risk tolerance, especially in light of recent fund liquidations in the Canadian market.