Bitcoin is facing significant challenges as it approaches what could be its worst losing streak since 2018. With February set to mark a fifth consecutive monthly decline, the situation echoes the prolonged downturn observed during the 2018-2019 bear market. This follows an already difficult start to the year, with Bitcoin logging its most dismal first 50 days on record, leading to a more than 25% drop year-to-date. Notably, February may also bring the unsettling distinction of back-to-back declines in both January and February for the first time in Bitcoin’s history.
In February, the bitcoin-to-gold ratio has experienced a significant drop, now sitting at 12.288 ounces, indicating a 70% reduction over the last 14 months. Bitcoin is also on track to close out this month as its worst since June 2022, when the price was hit hard by the collapse of the Terra-Luna ecosystem. Bitcoin’s current value of approximately $64,000 reflects a nearly 20% decline for February alone.
However, some analysts caution that likening the current stretch to the events of 2018 may oversimplify the deeper dynamics at play. Mati Greenspan, a senior market analyst at eToro and founder of Quantum Economics, emphasized that this isn’t merely a simple downturn but rather a repricing amid a structural regime shift. He noted that while macroeconomic factors like tariffs, ETF flows, and general market uncertainty may explain the timing of the selloff, they don’t fully account for the more profound changes in how markets value risk assets.
As Bitcoin approaches its fifth consecutive weekly downturn—the last similar streak occurring between March and May of 2022—geopolitical tensions have strengthened the U.S. dollar and crude oil prices, leading to tightened financial conditions that adversely affect risk assets. Interestingly, Bitcoin’s performance appears to diverge from traditional assets; while U.S. stocks remain quite resilient, Bitcoin has underperformed considerably, highlighting an atypical phase of instability in its correlation with equities.
Jonatan Randin, a senior market analyst at PrimeXBT, elaborated on this phenomenon, suggesting that Bitcoin currently lacks a clear narrative and is being pressured from multiple angles. Significant macro pressures, including $3.8 billion in ETF outflows over the past five weeks, escalating tariff conflicts, and a cautious stance from the Federal Reserve contribute to this environment. In contrast, gold has captured safe-haven flows, with its value rising around 48% since September, while Bitcoin has seen a decline of approximately 41% over the same timeframe. This divergence further emphasizes that investors are still treating Bitcoin more like a liquidity-sensitive risk asset rather than a stable alternative akin to gold.
The correlation between Bitcoin and the Nasdaq has also shown volatility. A dramatic swing from -0.68 to +0.72 in just a couple of weeks indicates a period of instability rather than a stable decorrelation. Randin suggested that when certain assets fall behind the risk-on trade, it usually signifies weakness rather than strength.
Despite the dramatic losses, analysts urge cautious interpretation of the current market state. Randin pointed out that Bitcoin has already seen a 52% drop from its October highs. While this may seem substantial, historical context shows that past bear markets have often witnessed drawdowns of 80% or more, leaving open the possibility that this correction is only halfway through. He noted that despite signals commonly associated with market bottoms, previous downturns have often led to further declines of 30% to 40% before a definitive low is established.
In contrast, Greenspan believes that sentiment may already be reflecting a high level of pessimism, positing that sharp reversals tend to occur when the market sentiment becomes overwhelmingly negative, even while long-term fundamentals stay intact.
Looking forward, Randin has identified key support levels, suggesting that unless Bitcoin can reclaim the range of $68,000 to $72,000, the downturn may persist. The immediate support is at $60,000, with a critical threshold at the 200-week moving average hovering around $58,500. Greenspan contextualized the current narrative by stating that while the focus on five months of losing streak is significant, the structural changes unraveling in Bitcoin’s market dynamics could span decades.
