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Bitcoin's Four-Month Losing Streak: The Longest Decline Since 2018

· 13 min read
Dora Noda
Dora Noda
Software Engineer

When Bitcoin nearly touched $60,000 on February 5, 2026, it wasn't just another volatile day in crypto markets—it was the culmination of the longest consecutive monthly decline since the brutal crypto winter of 2018. After reaching an all-time high of $126,000, Bitcoin has now shed over 40% of its value across four consecutive months of losses, erasing approximately $85 billion in market capitalization and forcing investors to confront fundamental questions about the digital asset's trajectory.

The Numbers Behind the Decline​

Bitcoin's January 2026 close marked its fourth straight monthly decline, a streak not witnessed since the aftermath of the 2017 ICO boom collapse. The magnitude of this downturn is staggering: Bitcoin fell nearly 11% in January alone, following consecutive monthly losses that brought the price from its December 2024 peak of $126,000 down to support levels around $74,600.

The worst single-day event occurred on January 29, 2026, when Bitcoin crashed 15% in a four-hour freefall from $96,000 to $80,000. What began as morning jitters above $88,000 unraveled into a capitulation event that saw 275,000 traders liquidated. Bitcoin spot ETFs hemorrhaged $1.137 billion in net redemptions during the five trading days ending January 26, reflecting institutional nervousness about near-term price action.

By early February, the Fear and Greed Index had plummeted to 12 points, indicating "extreme fear" among traders. Glassnode analysts recorded the second-largest capitulation among Bitcoin investors over the past two years, driven by a sharp increase in forced selling under market pressure.

Historical Context: Echoes of 2018​

To understand the significance of this four-month streak, we need to look back at Bitcoin's previous bear markets. The 2018 crypto winter remains the benchmark for prolonged downturns: Bitcoin reached a then-all-time high of $19,100 in December 2017, then collapsed to $3,122 by December 2018—an 83% drawdown over approximately 18 months.

That bear market was characterized by regulatory crackdowns and the exposure of fraudulent ICO projects that had proliferated during the 2017 boom. The year 2018 was quickly dubbed "crypto winter," with Bitcoin closing at $3,693—more than $10,000 down from the previous year's close.

While the current 2026 decline hasn't reached the 83% magnitude of 2018, the four consecutive monthly losses match that period's sustained negative momentum. For context, Bitcoin's 2022 correction measured about 77% from all-time highs, while major downtrends of 70% or more typically last an average of 9 months, with the shortest bear markets lasting 4-5 months and longer ones extending to 12-13 months.

The current downturn differs in one critical aspect: institutional participation. Unlike 2018, when Bitcoin was primarily a retail and speculative asset, 2026's decline occurs against a backdrop of regulated ETFs, corporate treasuries, and sovereign adoption strategies. This creates a fundamentally different market structure with divergent behavior between institutional and retail participants.

Institutional Diamond Hands vs. Retail Capitulation​

The most striking dynamic in the current decline is the stark divergence between institutional accumulation and retail capitulation. Multiple analysts have observed what they describe as a "transfer of supply from weak hands to strong hands."

MicroStrategy's Relentless Accumulation​

MicroStrategy, now rebranded as Strategy, remains the single largest corporate Bitcoin holder with 713,502 BTC on its balance sheet as of February 2, 2026—representing roughly 3.4% of total Bitcoin supply. The company's average purchase price stands at $66,384.56, with a total cost basis of $33.139 billion.

CEO Michael Saylor has raised close to $50 billion via equity and debt offerings over the past five years to accumulate Bitcoin. Strategy's latest moves show a consistent, aggressive strategy: raise capital, buy more Bitcoin, hold through turbulence. The company added 22,305 BTC in mid-January 2026 for $2.13 billion, demonstrating unwavering commitment even as prices declined.

What was viewed as a speculative gamble in late 2024 has become a staple for institutional portfolios by February 2026. Institutions like the North Dakota State Investment Board and iA Global Asset Management have added exposure, with institutional "dip-buying" reaching a fever pitch. Data shows institutional demand for Bitcoin outstripping new supply by a factor of six to one.

Retail Investors Exit​

In stark contrast to institutional accumulation, retail investors are capitulating. Multiple traders are declaring Bitcoin bearish, reflecting widespread retail selling, while sentiment data reveals extreme fear despite large wallets accumulating—a classic contrarian signal.

Analysts warn that large "mega-whales" are quietly buying as retail investors capitulate, suggesting a potential bottoming process where smart money accumulates while the crowd sells. Glassnode data shows large wallets accumulating while retail sells, a divergence that has historically preceded bullish momentum.

Some "hodlers" have trimmed positions, questioning Bitcoin's short-term store-of-value appeal. However, regulated Bitcoin ETFs continue to see institutional inflows, suggesting this is a tactical retreat rather than a fundamental capitulation. The steady institutional commitment signals a shift toward long-term investment, though associated compliance costs may pressure smaller market participants.

Bernstein's Bear Reversal Thesis​

Amid the downturn, Wall Street research firm Bernstein has provided a framework for understanding the current decline and its potential resolution. Analysts led by Gautam Chhugani argue that crypto may still be in a "short-term crypto bear cycle," but one they expect to reverse within 2026.

The $60,000 Bottom Call​

Bernstein forecasts Bitcoin will bottom around the $60,000 range—near its previous cycle high from 2021—likely in the first half of 2026, before establishing a higher base. This level represents what the firm describes as "ultimate support," a price floor defended by long-term holders and institutional buyers.

The firm attributes the potential turnaround to three key factors:

  1. Institutional Capital Inflows: Despite near-term volatility, outflows from exchange-traded funds after reaching peak levels remain relatively small compared to total assets under management.

  2. Converging U.S. Policy Environment: Regulatory clarity around Bitcoin ETFs and corporate treasury holdings provides a framework for continued institutional adoption.

  3. Sovereign Asset Allocation Strategies: Growing interest from nation-states in Bitcoin as a strategic reserve asset could fundamentally alter demand dynamics.

The Most Consequential Cycle​

While near-term volatility could persist, Bernstein expects the 2026 reversal to lay the groundwork for what the firm describes as potentially the "most consequential cycle" for Bitcoin. This framing suggests longer-term implications extending beyond traditional four-year market patterns.

Bernstein believes institutional presence in the market remains resilient. Major companies, including Strategy, continue to increase their Bitcoin positions despite price declines. Miners are not resorting to large-scale capitulation, a key difference from previous bear markets when hash rate declines signaled distress among producers.

Macroeconomic Headwinds and Geopolitical Uncertainty​

The four-month decline cannot be divorced from broader macroeconomic conditions. Bitcoin has traded down alongside other risk-on assets such as equities amid periods of high macroeconomic and geopolitical uncertainty.

Fed Policy and Inflation Concerns​

Interest rate expectations and Federal Reserve policy have weighed on Bitcoin's performance. As a non-yielding asset, Bitcoin competes with Treasury yields and other fixed-income instruments for investor capital. When real yields rise, Bitcoin's opportunity cost increases, making it less attractive relative to traditional safe havens.

Geopolitical Risks​

Geopolitical tensions have also contributed to Bitcoin's struggles. While Bitcoin advocates argue it should serve as "digital gold" during periods of uncertainty, the reality in early 2026 has been more complex. Institutional investors have shown a preference for traditional safe havens like gold, which hit record highs above $5,600 during the same period Bitcoin declined.

This divergence raises questions about Bitcoin's narrative as a store of value. Is it a risk-on speculative asset that trades with tech stocks, or a risk-off hedge that behaves like gold? The answer appears to depend on the nature of the uncertainty: inflation fears may support Bitcoin, while broader risk aversion drives capital to traditional hedges.

What the $74,600 Support Level Means​

Technical analysts have identified $74,600 as a critical support level—the "ultimate support" that, if broken decisively, could signal further downside to Bernstein's $60,000 target. This level represents the previous cycle high from 2021 and has psychological significance as a demarcation between "still in a bull market" and "entering bear territory."

Bitcoin's near-touch of $60,000 on February 5, 2026, suggests this support is being tested. However, it has held—barely—indicating that buyers are stepping in at these levels. The question is whether this support can hold through potential additional macroeconomic shocks or whether capitulation will drive prices lower.

From a market structure perspective, the current range between $74,600 and $88,000 represents a battleground between institutional accumulation and retail selling pressure. Whichever side proves stronger will likely determine whether Bitcoin establishes a base for recovery or tests lower levels.

Comparing 2026 to Previous Bear Markets​

How does the current decline compare to previous Bitcoin bear markets? Here's a quantitative comparison:

  • 2018 Bear Market: 83% decline from $19,100 to $3,122 over 18 months; driven by ICO fraud exposure and regulatory crackdowns; minimal institutional participation.

  • 2022 Correction: 77% decline from all-time highs; triggered by Federal Reserve rate hikes, Terra/Luna collapse, and FTX bankruptcy; emerging institutional participation through Grayscale products.

  • 2026 Decline (current): Approximately 40% decline from $126,000 to lows near $60,000 over four months; driven by macro uncertainty and profit-taking; significant institutional participation through spot ETFs and corporate treasuries.

The current decline is less severe in magnitude but compressed in timeline. It also occurs in a fundamentally different market structure with over $125 billion in regulated ETF assets under management and corporate holders like Strategy providing a price floor through continuous accumulation.

The Path Forward: Recovery Scenarios​

What could catalyze a reversal of the four-month losing streak? Several scenarios emerge from the research:

Scenario 1: Institutional Accumulation Absorbs Supply​

If institutional buying continues to outpace new supply by a factor of six to one, as current data suggests, retail selling pressure will eventually exhaust itself. This "transfer from weak hands to strong hands" could establish a durable bottom, particularly if Bitcoin holds above $60,000.

Scenario 2: Macro Environment Improves​

A shift in Federal Reserve policy—such as rate cuts in response to economic weakness—could reignite appetite for risk assets, including Bitcoin. Additionally, resolution of geopolitical tensions could reduce safe-haven demand for gold and increase speculative capital flows into crypto.

Scenario 3: Sovereign Adoption Accelerates​

If nation-states beyond El Salvador begin implementing strategic Bitcoin reserves, as proposed in various U.S. state legislatures and international jurisdictions, the demand shock could overwhelm near-term selling pressure. Bernstein cites "sovereign asset allocation strategies" as a key factor in its bullish longer-term thesis.

Scenario 4: Extended Consolidation​

Bitcoin could enter an extended period of range-bound trading between $60,000 and $88,000, gradually wearing down sellers while institutional accumulation continues. This scenario mirrors the 2018-2020 period when Bitcoin consolidated between $3,000 and $10,000 before breaking out to new highs.

Lessons for Bitcoin Holders​

The four-month losing streak offers several lessons for Bitcoin investors:

  1. Volatility Remains Inherent: Even with institutional adoption and ETF infrastructure, Bitcoin remains highly volatile. Four consecutive monthly declines can still occur despite regulatory maturity.

  2. Institutional vs. Retail Divergence: The behavior gap between institutional "diamond hands" and retail capitulation creates opportunity for patient, well-capitalized investors but punishes overleveraged speculation.

  3. Macro Matters: Bitcoin does not exist in isolation. Federal Reserve policy, geopolitical events, and competition from traditional safe havens influence price action significantly.

  4. Support Levels Hold Significance: Technical levels like $60,000 and $74,600 serve as battlegrounds where long-term holders and institutional buyers defend against further declines.

  5. Timeframe Matters: For traders, the four-month decline is painful. For institutional holders operating on multi-year horizons, it represents a potential accumulation opportunity.

Conclusion: A Test of Conviction​

Bitcoin's four-month losing streak—the longest since 2018—represents a crucial test of conviction for both the asset and its holders. Unlike the crypto winter of 2018, this decline occurs in a market with deep institutional participation, regulated investment vehicles, and corporate treasury adoption. Yet like 2018, it forces a confrontation with fundamental questions about Bitcoin's utility and value proposition.

The divergence between institutional accumulation and retail capitulation suggests a market in transition, where ownership is consolidating among entities with longer time horizons and deeper capital bases. Bernstein's forecast of a reversal in the first half of 2026, with a bottom around $60,000, provides a framework for understanding this transition as a temporary bear cycle rather than a structural breakdown.

Whether Bitcoin establishes a durable bottom at current levels or tests lower depends on the interplay between continued institutional buying, macroeconomic conditions, and the exhaustion of retail selling pressure. What's clear is that the four-month losing streak has separated speculative enthusiasm from fundamental conviction—and the institutions with the deepest pockets are choosing conviction.

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