Cryptocurrencies closed out February largely unchanged as an enthusiastic rally to kick off 2023 stalled in the year's second month.

In February, ether (ETH-USD), the market's second-largest cryptocurrency, outpaced its larger peer bitcoin (BTC-USD) rising 1.6% against bitcoin's more modest 0.4% increase during the month. In January, bitcoin gained nearly 40% to record its best start to a year since 2013.

Christopher Newhouse, a crypto options trader with GSR, said the February action in bitcoin was "definitely more boring for directional trading than in January."

As Newhouse explained, crypto derivatives trading volume remained high in February but volatility fizzled over the month. Bitcoin is still the most popular cryptocurrency for traders, but in recent weeks those bets "toward the end of the month have been mixed or slightly bearish."

Over the same period, the major U.S. indexes were lower, with the benchmark S&P 500 (^GSPC) falling 2.5% during the month.

"Only short-term interest in Bitcoin was tepid," Michael Safai, co-founder and partner of crypto trading firm, Dexterity Capital told Yahoo Finance. Safai pointed to U.S. regulatory crackdowns over recent weeks as another reason investors may be taking a more cautious approach to cryptocurrencies.

In an annual report filed Monday afternoon, Robinhood (HOOD) shared the latest regulatory probe, alerting investors that the SEC subpoenaed the company in December to inquire about how it lists and holds cryptocurrencies in custody.

"There's still optimism that things will start to get figured out in the coming months," Safai added, pointing to longer-dated bitcoin call options placed this month with a strike price of $30,000.

Since the beginning of 2023, bitcoin watchers have focused closely on whether bitcoin's price can breach $25,000. Between February 19-20, the level was briefly reached. Bitcoin has since fallen more than 6% and is currently changing hands near $23,200.