Bitcoin sector at the crossroads: 5 months of decline and potential recovery signals

Bitcoin is facing an important period in the sector—if February ends in red, it will be the fifth consecutive month of decline, marking the longest bearish streak since 2018–2019. But the interesting part isn’t just the number; it’s the broader market picture behind the red candles. While prices are under continuous selling pressure, the fundamental structure of the Bitcoin sector shows unusual signs.

Prolonged Weakness and Current Market Structure

Weak rebounds over the past five months haven’t been enough to change the trend, reflecting a clear defensive stance of capital after the previous hot rally. Selling pressure remains steady, creating a cautious overall market outlook. However, market history in the Bitcoin sector tells a different story—such long downtrends often don’t end quietly but set the stage for strong recoveries and even multi-month rallies as liquidity begins to return.

On-chain Data: The Hidden Map of Real Investors

Notably, while prices are under pressure, the fundamentals of the Bitcoin sector are nearly intact. Spot Bitcoin ETFs hold over $100 billion in assets, demonstrating that long-term demand remains strong. Institutional capital continues to be present, even if not chasing prices with the same enthusiasm as before.

The behavior of wallets holding 10–100 BTC is particularly intriguing—they continue to accumulate, indicating a strategic buy-and-hold approach at lower levels. This is typical of stable-minded investors, not panicked sellers.

Support Policies: Signals from the Macro Level

On the policy front, the Bitcoin sector is gaining attention from authorities. The CLARITY Act on digital asset markets is still being pushed through the Senate, with a potential passage in April. This is no small detail—such policy milestones often serve as catalysts for new cycles in the Bitcoin sector.

Together, this is a phase where the narrative may temporarily quiet down, but the long-term structure is gradually rebuilding from the ground up. The fundamentals remain intact, smart investors are accumulating, and supportive policies are being implemented step by step. The Bitcoin sector isn’t just about falling prices; it’s a process of restructuring ahead of an underlying recovery.