Quick Takeaways
- Bitcoin has closed four straight months in the red for the first time since 2018.
- Crypto, stocks, and amber are selling off together amid fluidity repricing.
- Analysts see a short-term stress but have a bun in the oven for a potential bottom later in 2026.
Bitcoin extended its downturn in January, fell below $78, 000 and marked an uncommon milestone. The asset has now closed four consecutive calendar months in the red.
It is the first such streak since 2018. Analysts say the move speculates an across-the-board repricing of global liquidity.
Crypto, fairness, and wanted metallic elements betray off together. The shift wiped out the defensive play that supported markets early on this year.
Liquidity Reset Drives Cross-Asset Selloff
Market observers increasingly describe the movement as macro-driven. They go out for a liquidity reset rather than a crypto-specific weakness.
Timothy Misir, head of inquiry at BRN, called late January a decisive danger-off phase. He cited the rate uncertainty and tighter financial conditions.
The shift followed hotter U. S. inflation data and policy uncertainty. It triggered contemporized de-risking across plus classes.
Gold swung nearly 7% from late highs. Silver also places a sharp reversal.
QCP Capital said rising allowance requirements accelerated future unwinds. Even traditional good oases failed to hold back bids.
Institutional Outflows Weigh on Bitcoin
Institutional flows worsened the pressure on digital assets. Crypto investment products saw heavy weekly withdrawals.
CoinShares data shows $1.7 billion exited crypto funds last week. That followed $1.6 billion in January ETF redemptions.
January became Bitcoin’s weakest year opening since 2022. CoinGlass data confirms the decline.
Spot bitcoin ETFs recorded $1.49 billion in weekly outflows. Ether-linked funds lost another $327 million.
Analysts say ETF redemptions amplified downside momentum. The exits removed a key support layer.
Derivatives Unwind Accelerate the Decline
Derivatives markets intensified the selloff. Futures positioning collapsed as traders cut exposure.
Bitcoin briefly touched $74,500 earlier this week. That marked a drawdown exceeding 20% from January highs.
Samer Hasan of XS.com said open interest fell sharply. Speculative traders stepped back amid uncertainty.
CoinGlass data shows total crypto futures open interest near $109 billion. That is more than 50% below its peak.
Bitcoin futures open interest dropped to roughly $52 billion. The Block’s data shows an even deeper decline.
The downturn triggered heavy liquidations. Roughly $5 billion in longs were wiped out in six days.
Onchain Signals and Long-Term Outlook On-chain metrics also weakened during the selloff.
Misir said many recent buyers are underwater. That raises near-term capitulation risk.
Miners have continued sending coins to exchanges. This added supply during declining liquidity.
Technical traders are watching CME futures closely. A large downside gap remains unfilled.
The zone between $78,000 and $84,500 stands out. It could act as a short-term magnet during rebounds.
Despite pressure, analysts urge caution. Historical drawdowns were often deeper.
Nic Puckrin of Coin Bureau noted the current decline is near 40%. Previous cycles saw drops exceeding 70%.
He added that Bitcoin volatility is declining over time. That may limit downside depth this cycle.
Others see signs of accumulation. Large wallet counts continue rising.
Bernstein analysts expect a bottom later in 2026. They project a possible floor near $60,000.
For now, markets remain in reset mode. Liquidity, not narratives, is back in control.