Bitcoin’s four-month losing streak: what is different this time
Bitcoin, which topped $120,000 in October 2025, finally gave up even the $80,000 level in late January 2026, posting four straight monthly red candles.
Both the length and depth of the decline are too large to call a simple correction; it recalls the early stages of the 2018 and 2022 bear markets.
In the last week of January alone, Bitcoin plunged 5–7% within 24 hours and fell below $80,000 twice in two days.
Over the same period, Ethereum and Solana dropped more than 10%, and about $100 billion was wiped off the total crypto market cap.
Reason 1: the ‘Warsh effect’ and macro repricing
The most notable event in this sell-off was President Trump’s nomination of Kevin Warsh as Fed chair.
Warsh took a relatively hawkish stance during the financial crisis, and markets priced in a signal of “no excessive easing,” starting to cut leverage across risk assets.
Interestingly, Bitcoin barely reacted even as the dollar index slid to near a four-year low and gold and silver prices rallied strongly.
For money that came in believing the “digital gold” narrative, Bitcoin can only look like an awkward asset that neither moves like a traditional safe haven nor rises like a growth stock.
Reason 2: spot ETF flows went ‘into reverse’
US spot ETFs, which kicked off the rally in early 2024, became a main driver accelerating the decline in January 2026.
Net outflows for January totaled about $1.6 billion, the third-largest monthly outflow since launch, and it was the first time money had flowed out for three months in a row.
Structurally, ETFs can create a positive feedback loop of “spot buying → rising prices → more inflows,” but when the direction turns, it becomes a negative loop of “spot selling → falling prices → more redemptions.”
We are now closer to the latter, with the institutional buying story that powered the 2025 rally running in reverse.
Reason 3: thin liquidity and derivatives liquidations deepened the drop
The late-January plunge was concentrated in weekends and overnight hours, when liquidity is thinnest.
During these windows, long positions built up in both spot and futures were liquidated all at once, creating a market that slid in the short term “not because of sellers, but because there were no buyers.”
According to on-chain and derivatives data, about $1.4 billion in long positions were forcibly liquidated in the last 24 hours alone.
With spot ETF selling and leverage liquidations overlapping, a structure emerged in which prices overreacted even to relatively minor news.
Reason 4: on-chain indicators point to an ‘ambiguous zone’
The reason it is hard to call the market either on the verge of collapse or a golden buying opportunity lies in on-chain valuation.
The MVRV Z-Score, a widely used cycle indicator, stood at about 1.3 as of January 2026. That is far below past cycle tops (7 or higher) but not as cheap as historical lows (0 or below), pointing to “near fair value.”
In short, Bitcoin is not collapsing because it is absurdly expensive. It is closer to
- expectations for aggressive liquidity injections fading,
- ETF money flowing out,
- and buyers disappearing amid narrative fatigue,
“a process of the price being dragged back to where it belongs.”
4 conditions for the next bull market
For Bitcoin to rise structurally again, at least the following four conditions need to line up at the same time.
- Policy: restored confidence in the rate path
- Flows: a return to ‘net inflows’ in ETFs and spot
- On-chain: clearer signs of re-accumulation
- If the MVRV Z-Score drops to the 0–1 range and rebounds, or moves sideways in the 1–2 range for a long time while real trading volume rises, it can be read as “a zone where strong hands are absorbing supply.”
- ‘Classic bottom patterns’ appearing, such as falling exchange balances, a rising share of supply held by long-term holders and widening unrealized losses among short-term holders.
- Narrative: a new story after ETFs
- More real-world use and institutional adoption of Bitcoin, in areas such as the spread of central bank digital currencies (CBDCs), inclusion in national reserve assets, and global payment and remittance infrastructure.
- The market convincingly embracing a new positioning as “a digital store of value independent of monetary policy,” separate from the AI and tech bubble debate.
The moment these four conditions line up at once is when “the logic of the next cycle” is redefined, and it is likely to mark the start of a structural bull market rather than a mere price bounce.
BITPRESS Insight
At times like now, when ETF money is flowing out and on-chain indicators are ambiguous, many investors make only a vague plan to “buy if it falls further” and in reality do nothing.
But past cycles show that the real returns went to investors who tracked not the price, but the conditions. If you systematically monitor just a few key variables, such as a turn to net ETF inflows, re-accumulation signals in the MVRV Z-Score and changes in the long-term holder share, you can sense the direction of the next bull market months ahead of the news headlines.
