Red consecutive months: Bitcoin market structure as the flow of capital provided enters a new phase

Bitcoin is facing a critical milestone. If February closes below the red zone, it will mark the fifth consecutive month of decline — the longest downtrend since the 2018–2019 bear market. What’s truly notable isn’t just this figure, but how the market has operated throughout this decline, especially the behavior of providers — those who supply liquidity and capital to the market.

Longest decline since the 2018–2019 bear market

Historically, five-month downtrends in Bitcoin aren’t uncommon, but they occur infrequently. The current correction reflects a clear defensive stance by investors after a hot rally. Capital from providers — both individuals and institutions — seems to have pulled back from aggressive buying, shifting toward a preservation strategy.

Price rebounds appear, but they are too weak and short-lived to change the overall trend structure. This indicates a market where buyers lack the confidence to step in decisively, or providers are waiting for clearer signals before re-entering.

Persistent selling pressure and weak market structure: signs of capital defense

Unlike previous declines, this sell-off isn’t driven by major shocks but by continuous pressure gradually eroding confidence. This suggests providers aren’t completely exiting risk but are systematically reducing their positions in a disciplined manner.

However, looking at market history, such prolonged declines rarely end quietly. They often set the stage for a strong recovery — sometimes lasting months — as liquidity returns from providers and market sentiment is restored.

Fundamentals remain strong: Bitcoin ETF and ongoing accumulation

The most interesting aspect currently is that, despite selling pressure from providers seeking risk mitigation, Bitcoin’s fundamentals remain largely intact:

• Bitcoin ETFs continue to hold massive assets: Spot funds manage over $100 billion, indicating long-term institutional demand remains alive. This signals that professional providers have not lost faith in Bitcoin’s long-term prospects.

• Wallet groups holding 10–100 BTC continue to accumulate: This behavior reflects investors buying at lower prices. Only when prices weaken do these providers ramp up buying — a proven strategy in previous Bitcoin cycles.

• Institutional capital remains present: While no longer aggressively chasing prices as before, funds and institutional investors maintain their presence, ready for the next upward move.

CLARITY Act: Policy opportunities that could change the game

A key factor to watch is policy development. The US Senate is pushing the Digital Asset Market Clarity Act, which is likely to pass by April. If enacted, it would provide clearer legal frameworks for providers — from retail traders to institutional funds — to participate in Bitcoin markets with greater confidence.

Long-term buildup: When narratives weaken but structures rebuild

With all these factors, we are in a phase where the market narrative may temporarily fade, but the underlying structure is gradually being reconstructed. Providers — from small accumulators to large funds — are engaging in long-term actions that history shows often lead to price jumps.

The consecutive red months are not the end but a phase of accumulation — an essential part of Bitcoin’s market cycle that successful investors anticipate and wait for.