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Bitcoin's Seven-Year Losing Streak

· 11 min read
Dora Noda
Dora Noda
Software Engineer

When Bitcoin fell below $67,000 in early February 2026, it marked a psychological milestone that few anticipated: the world's largest cryptocurrency was now worth less than it was on President Trump's election day in November 2024. But this wasn't just another correction—it represented the fourth consecutive monthly decline, a losing streak not seen since the brutal crypto winter of 2018.

The Numbers Behind the Rout​

Bitcoin's descent has been both steady and severe. From its October 2025 all-time high, the cryptocurrency has declined roughly 36% over four consecutive months—October, November, December, and January all posted negative monthly closes. The asset fell to a 10-month low near $74,500 in late January, wiping out all gains since Trump's election victory.

The magnitude of this drawdown becomes clearer when viewed through on-chain data. According to Glassnode, realized losses over the past 30 days totaled approximately $12.6 billion, a level exceeded on only 191 trading days in Bitcoin's entire history. This represents the second-largest investor capitulation event in two years.

As of February 5, the Fear and Greed Index stood at 12 points, signaling "extreme fear" among traders—a stark contrast from the euphoria of just months earlier.

A Pattern Not Seen Since 2018​

Historical context makes this decline even more notable. Bitcoin's current four-month losing streak equals a pattern not seen since the 2018-2019 period, when the market recorded six straight red months following the collapse of the initial coin offering boom. That previous streak became a defining moment of the last crypto winter, and many are now asking whether history is repeating itself.

The comparison to 2018 is particularly apt given the similar market dynamics: both periods followed major bull runs driven by new investment vehicles (ICOs then, spot ETFs now), and both saw rapid sentiment shifts as speculative froth evaporated.

Retail Capitulation Meets Institutional Diamond Hands​

Beneath the surface price action, on-chain metrics reveal a tale of two investor classes moving in opposite directions.

Retail investors are capitulating. The magnitude of realized losses and the extreme fear reading suggest that less-experienced holders are exiting positions at a loss. Panic selling during thin liquidity periods has amplified price declines, creating the kind of forced deleveraging that characterizes market bottoms.

Institutional investors, however, are accumulating. Companies like Strategy Inc. and Japan's Metaplanet expanded their Bitcoin holdings during the January downturn. More tellingly, spot Bitcoin ETFs reversed their year-end outflow trend with $400 million in net inflows as prices fell, with institutional buyers quietly accumulating when Bitcoin hit $78,276 amid extreme fear.

Institutional sentiment surveys reinforce this divergence: 71% of professional investors viewed Bitcoin as undervalued between $85,000 and $95,000, with many expressing willingness to increase exposure after further declines.

This behavioral split represents a fundamental shift in Bitcoin market structure. The transition from retail-led cycles to institutionally distributed liquidity means that traditional retail capitulation signals may no longer mark bottoms with the same reliability.

The Trump Inauguration Premium Evaporates​

The psychological impact of falling below Trump's election-day price cannot be overstated. On Inauguration Day, January 20, 2025, Bitcoin hit a new intraday high of $109,114, fueled by expectations of pro-crypto policy initiatives. One year later, on January 20, 2026, it was hovering around $90,500—a 17% decline that has since accelerated.

This represents a textbook "buy the rumor, sell the news" pattern, but with lasting consequences. The euphoria of the inauguration front-ran the reality of legislative timelines, while actual policy implementation has proven slower and more structural than markets anticipated. What traders expected would be a political catalyst for immediate adoption instead became a lesson in the disconnect between political signaling and regulatory execution.

The collapse of Trump-branded cryptocurrencies has only deepened the psychological blow. The meme coin TRUMP now trades at \3.93—a fraction of the $45 asking price just before the inauguration.

The $56,000 Question: Where Is the Floor?​

As Bitcoin continues its descent, attention has turned to technical and on-chain support levels. The realized price—which reflects the average cost basis of all Bitcoin holders—currently sits around $56,000. Galaxy Digital research lead Alex Thorn has suggested BTC could plunge to this level in coming weeks due to the lack of catalysts to reverse the trend.

The realized price has historically served as a strong support level during bear markets, representing the point where the average holder is at break-even. Current data shows significant accumulation by new participants in the $70,000 to $80,000 range, suggesting early positioning by buyers willing to support the market at these levels.

Analysts at Compass Point argue that the crypto bear market is nearing its end, with $60,000 as a key Bitcoin floor. They note that the phase of long-term holders selling appears to be ending, while institutional allocations "gradually rise from still-modest levels."

However, the outlook remains uncertain. If Bitcoin cannot hold the $65,000 support level, technical analysts warn of further downside targets at $60,000 or below, potentially testing the $56,000 realized price before establishing a durable bottom.

ETF Flows: The Institutional Tug-of-War​

Bitcoin ETF flows in early 2026 tell a story of institutional ambivalence. The year began strongly, with spot Bitcoin ETFs drawing $471 million in net inflows on January 2, led by BlackRock's IBIT with approximately $287 million in new capital. This suggested institutional reallocating after a period of tax-loss harvesting.

But the optimism was short-lived. From November 2025 through January 2026, the spot Bitcoin ETF complex shed about $6.18 billion in net capital—the longest sustained outflow streak since these vehicles launched. In one particularly brutal session in late January, U.S.-listed Bitcoin and Ether ETFs saw nearly $1 billion in outflows as prices tumbled below $85,000.

February brought a reversal. U.S. spot Bitcoin ETFs recorded $561.8 million in net inflows on February 3—the largest single-day intake since January 14, with BlackRock's IBIT and Fidelity's FBTC leading the buying at $142 million and $153.3 million respectively.

This volatility in ETF flows reveals the internal debate within institutional investment committees: are current prices a buying opportunity, or does Bitcoin's correlation with risk assets and lack of positive catalysts warrant caution? The data suggests institutions themselves are divided.

Macro Headwinds and Thin Liquidity​

Multiple factors have conspired to create this perfect storm. Geopolitical instability, expectations for tighter Federal Reserve policy under incoming Chairman Kevin Warsh, and the absence of clear positive catalysts have all contributed to selling pressure.

Crucially, thin market liquidity has amplified every move. With reduced market depth, even modest selling pressure has generated outsized price impacts, creating a self-reinforcing downward spiral as long positions are forced to liquidate.

The correlation between Bitcoin and traditional risk assets has also strengthened during this period, undermining the "digital gold" narrative that attracted some institutional capital. When Bitcoin moves in lockstep with tech stocks during risk-off periods, its portfolio diversification value diminishes.

What Comes Next: Bottom Formation or Further Pain?​

Market observers are divided on whether Bitcoin is forming a bottom or facing additional downside.

Bulls point to several constructive factors: realized losses at levels historically associated with market bottoms, institutional accumulation at current prices, and post-halving supply dynamics that typically support price recovery 12-18 months after the event. Tiger Research's Q1 2026 Bitcoin valuation report suggests a fair value of $185,500 based on fundamental metrics, implying massive upside from current levels.

Bitwise and other institutional forecasters cluster their end-2026 price targets between $120,000 and $170,000, assuming ETF inflows remain positive, rate cuts proceed gradually, and no major regulatory shocks occur.

Bears counter with equally compelling arguments: technical indicators showing further downside momentum, the absence of near-term positive catalysts, risks from remaining Mt. Gox liquidations, and the possibility that the four-year cycle thesis has been broken by ETF-driven institutional flows.

Analysts at AI Invest note that if the $60,000 level fails to hold, Bitcoin could enter "systemic weakness" territory, potentially testing lower support levels before establishing a sustainable bottom.

The Structural Transformation Continues​

Beyond the near-term price action, this losing streak represents a milestone in Bitcoin's ongoing transformation. The divergence between retail capitulation and institutional accumulation reflects a market transitioning from speculation-driven cycles to mature asset allocation.

As one analyst noted, "2026 is about durability over speculation." The current drawdown is pruning speculative excess while testing the conviction of holders who view Bitcoin as a strategic long-term allocation rather than a momentum trade.

For infrastructure providers, this period presents both challenges and opportunities. Lower prices reduce transaction values but can increase network activity as traders seek to optimize positions or take advantage of volatility.

The buildout of on-chain infrastructure continues regardless of price. Development of Layer 2 solutions, improvements in custody systems, and integration of blockchain data into traditional financial workflows all proceed independent of Bitcoin's monthly closes.

Conclusion: Seven Years to the Next Chapter​

Bitcoin's four-month losing streak—the longest since 2018—marks a defining moment for the maturing cryptocurrency market. The divergence between panicked retail sellers and opportunistic institutional buyers, the psychological blow of falling below Trump's election-day price, and the technical possibility of testing the $56,000 realized price all contribute to a market at an inflection point.

Whether this represents the bottom of a healthy correction or the beginning of a deeper retracement remains to be seen. What is clear is that Bitcoin's market structure has fundamentally evolved. The days of purely retail-driven volatility are giving way to a more complex interplay between institutional allocation decisions, macroeconomic conditions, and technical support levels.

For those building on and serving the blockchain ecosystem, the message is consistent: focus on infrastructure that works across price cycles, serve both speculative and strategic users, and recognize that Bitcoin's long-term trajectory depends less on monthly closes and more on the steady accumulation of real-world utility and institutional integration.

The seven-year pattern may be historic, but the next chapter of Bitcoin's story is still being written—one block, one transaction, and one institutional allocation decision at a time.

Sources​

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