The crypto decline of Bitcoin: understanding a major turning point in the markets

At the end of February, Bitcoin is about to set a sad record: its fifth consecutive monthly loss, marking the worst start to the year ever observed in the history of the largest cryptocurrency. This prolonged crypto decline is raising questions about a structural phenomenon far more complex than a simple technical correction.

With a price hovering around $67,350, Bitcoin has fallen more than 25% since the beginning of the year, and February alone has seen nearly a 20% drop. Over five consecutive months, the decline totals approximately 52% from October 2025 highs. This unprecedented series of pullbacks since 2018-2019 raises fundamental questions about how investors are re-evaluating digital assets amid increased uncertainty.

Five consecutive months of crypto decline: the worst scenario since 2018

The correlation between Bitcoin and traditional markets has undergone a profound transformation. While gold has gained about 48% since September, Bitcoin has experienced a similar decline of 41% over the same period. This phenomenon reveals a shift in investor perception: contrary to the narrative of “digital gold,” BTC continues to be treated as a risky asset sensitive to liquidity movements rather than a safe haven store of value.

Market outflows via Bitcoin ETFs have reached $3.8 billion over the past five weeks, reflecting a systematic shift of flows toward other asset classes. Geopolitical tensions and Federal Reserve hesitation regarding rate cuts have tightened financial conditions, penalizing cyclical assets and speculative instruments.

A regime change rather than simple weakness

Mati Greenspan, chief analyst at eToro and founder of Quantum Economics, dismisses the simplistic analogy with 2018: “What we’re seeing isn’t just weakness. It’s a re-evaluation within the context of a structural regime change.”

This development reveals how markets are reinterpreting Bitcoin. While U.S. stocks have shown notable resilience driven by AI momentum, Bitcoin has underperformed significantly, widening its gap from its traditional correlation with risky assets. The Bitcoin-Gold ratio, which once stood at much higher levels, has plunged to 12,288 ounces, marking a 70% decline over the past 14 months.

“Bitcoin currently has no narrative, and it’s squeezed from both sides,” says Jonatan Randin, chief market strategist at PrimeXBT. This compression illustrates the absence of a unified story capable of justifying a significant allocation: neither the sovereign protection narrative works against the demand for safe-haven gold, nor does cyclical positioning match the trajectory of tech stocks.

Contradictory market signals: accumulation vs. negative sentiment

Despite the magnitude of the crypto decline, technical indicators send mixed messages. The weekly Relative Strength Index (RSI) has reached its lowest levels historically, often a sign of potential inflection points. Meanwhile, wallet addresses have absorbed about 372,000 BTC since late December, indicating notable accumulation.

However, these signals of potential lows do not guarantee an immediate reversal. Randin notes that during previous bear corrections, similar conditions were followed by further declines of 30% to 40% before a true bottom formed. With Bitcoin down 52% from its highs, and knowing that previous bear markets saw declines of 80% or more, it’s possible that the correction is only halfway through.

The extreme volatility of the BTC-Nasdaq correlation in February has amplified this uncertainty. The 20-day correlation shifted from -0.68 to +0.72 between early and mid-February, indicating not a stable decoupling but systemic instability. “When risk-on trades work and an asset is sidelined, it usually signals structural weakness, not strength,” Randin explains.

Where are the critical levels for a trend reversal?

For strategists, price zones are crucial. The prolonged crypto decline in Bitcoin will likely only reverse if the price can sustainably recover the $68,000 to $72,000 zone, according to analyses. Below that, a prolonged consolidation or another downward wave remains probable.

The key short-term support level is around $60,000, with the 200-week moving average close at $58,500. These levels are psychologically and technically important for institutional investors and traders.

Greenspan offers an alternative perspective: the uniformly negative sentiment currently observed could paradoxically set the stage for a sharp turnaround. “When sentiment becomes so uniformly negative while long-term fundamentals remain intact, reversals tend to be sudden and violent,” he says. However, he nuances this: “The story of a series of defeats focuses on five months. The structural story spans decades.”

This perspective highlights a fundamental contrast: while the short-term crypto decline reflects legitimate tactical doubts, Bitcoin’s long-term trajectory still rests on its original value proposition as a decentralized alternative to fiat monetary systems based on debt. The question remains: is the market evaluating a temporary cyclical rejection or a fundamental re-evaluation of this proposition?