Bitcoin is heading toward an uncomfortable juncture, with a February ending in the red potentially marking its fifth consecutive month of declines, and the setup is starting to look more like a macro-driven repricing than a crypto-specific drawdown.
This five-month streak is remarkable in the post-ETF era and would be Bitcoin’s longest monthly decline since 2018, when it suffered six consecutive months of declines during a bear market.
BTC below $63,000 is down about 20% this month, the largest monthly drawdown since June 2022.
However, the continuous decline in prices itself is not the main issue.
The bigger change is that Bitcoin is priced in a different regime, where ETF flows, interest rate expectations, and risk sentiment among assets are given more weight than crypto-native catalysts.
As a result, BTC traders are no longer focusing on the timing of a return to new highs. Instead, the discussion has shifted to where the next durability bid is, with the hottest level being $58,000.
Markets driven by ETF flows, positioning, and macros
Over the past few weeks, Bitcoin has been trading as a high-beta risk commodity rather than an independent digital asset.
This difference is important because it changes the way a trader reads the tape.
In cryptocurrency-driven markets, adoption, protocol upgrades, or long-term scarcity narratives can dominate short-term price trends.
In the current setup, the key inputs are familiar to macro traders: flow data, option positioning, and broader risk appetite.
The changes are most clearly visible in the movements of ETFs.
When the Spot Bitcoin ETF had steady inflows, it often automatically created demand and rebounded. These developments acted as a cushion not because the market was bullish, but because the structure itself required buying.
Now, the opposite dynamic is at work. A sustained exodus doesn’t just strip support. They can be a source of supply pressure.
U.S. Spot Bitcoin ETFs have recorded more than $4.5 billion in net outflows this year, showing that institutional demand through the ETF wrapper remains under pressure even as parts of the market continue to look for the floor.
This is a large change in marginal demand and helps explain why the rebound is so difficult to sustain.
CryptoQuant’s data further supports why spot Bitcoin ETFs have become essential to BTC’s price performance.
Since May 2025, the daily trading volume of the Bitcoin Spot ETF has exceeded the combined trading volume of the world’s centralized exchanges. Currently, 55% of daily Bitcoin spot trading volume comes from ETFs.
Fundamentally, institutional capital flows are now the main liquidity channel in the market and are no longer part of the market.
This will shift the center of gravity of the market as retail investors become increasingly responsive to Wall Street-driven price discovery processes.
The result is a tape that looks like a macro asset under stress, creating a market that keeps dropping highs, testing support, and revisiting the same price ranges until the flow backdrop improves or a stronger floor is established.
Why $58,000 became a major stress test level
The increased attention to $58,000 is not about a single chart pattern. This reflects framework convergence.
The first is the long cycle technical structure. The 200-week EMA remains one of Bitcoin’s most widely followed regime indicators.
In past bearish phases and late-cycle resets, price action around that level has often forced a broader reassessment of whether it is a correction within an uptrend or the beginning of a deeper rally.
The second is on-chain cost-based gravity. Under the contested zone, traders are focused on total cost-based metrics that include realized price type anchors.
Once Bitcoin starts moving towards its holders’ average embedded purchase price, its behavior tends to change.
Some investors choose to reduce risk and lock in losses. Others intervene because the price looks low compared to the network’s purchase history.
The third is the current scope demand cluster.
Recent on-chain analysis points to a battleground between $60,000 and $69,000, where demand is absorbing repeated selling pressure.
If this zone breaks cleanly, $58,000 would be the next clear reference point, sitting below the cluster and above the deeper cost-based anchor.
For this reason, $58,000 is best understood as a stress test and not necessarily the final floor.
If the market holds there, it could be the start of a base. If that fails, attention could quickly shift to deeper on-chain levels in the mid-$50,000s.
Options markets are showing systematic downside demand, not panic.
Derivatives data supports why $58,000 is in focus.
Deribit data shows a continued downtrend in the current range, with options market traders continuing to position to the downside through protection trades and bearish expressions.
The structure of these trades is important because it helps explain what moves participants are preparing for.
According to the company, BTC’s put skew has returned to its February 5th level, with implied volatility trading more than 10% above realized volatility over a 7-day period.
This combination indicates strong demand for downside protection and has not resulted in a new spot crash on the same scale as the February 5th move.
Demand is concentrated around the $58,000 strike. Traders are actively trading 58,000 puts, put spreads and risk reversals, and the derivatives market is increasingly organizing around that level as the main downside benchmark.
Derivit noted that the most obvious example was the addition of a 58,000 put on March 6, where a notional value of about $200 million was bought at a premium of about $2 million.
This is important because it suggests the fund is positioning for lower levels, not necessarily a sudden capitulation.
In tough markets, put spreads and risk reversals are more efficient than outright puts because they reduce premium costs and extend the period of potential profit of the trade.
At the same time, Alex Thorne, head of research at Galaxy Digital, said Bitcoin is approaching unprecedented oversold territory.
Thorne said the weekly RSI is lower than it has been at any time except what he calls the darkest bearish period, noting that the only lows since 2016 were in November and December. In 2018, Bitcoin fell from around $6,000 to $3,000, and in June and July, 2022, before the collapse of Three Arrows Capital and the disclosure of Genesis’ bankruptcy.
This does not guarantee a rebound, but statistically the current situation has reached its limit, even if the market still needs a catalyst to stabilize.
On-chain data shows where deeper pain and support may emerge
CryptoQuant data on long-term holders adds another layer to the market decision-making tree.
According to the company, long-term holders (LTH) are a group that is generally less sensitive to short-term price fluctuations, but they still generate returns of about 74% on average.
This means that while the cohort has not yet been exposed to widespread stress, margins are shrinking as spot prices fall.
CryptoQuant estimates the LTH cost basis to be around $38,900, and this number is rising over time as short-term holders who bought at high prices age into the long-term category.
In other words, the pain threshold is not fixed. Climb according to the cycle.
CryptoQuant noted that historically, bear markets often result in below LTH cost benchmarks, followed by a final capitulation phase with realized losses of around 20%.
This is usually the type of washout that de-leverages and allows for a more durable rebuild.
CryptoQuant cautioned that this is only an observation based on a limited number of occurrences. This warning is especially important in the current cycle.
The ownership structure of Bitcoin has changed. Institutions, legal entities, and sovereign actors now play a greater role than in previous cycles.
These participants bring different missions, time horizons, and liquidity profiles, and their structural changes could change how the market behaves around traditional on-chain pain points.
This is one reason why the mid-$50,000 to $60,000 region is so important.
This could act as a zone where old cycle patterns and new cycle market structure meet, allowing traders to see whether institutional participation will soften drawdowns or simply amplify them through ETF flows and macro-sensitive positioning.
The next move will depend on whether the market can repair itself or has to flush.
The most obvious way to structure Bitcoin at the end of the month is as a series of paths rather than a single prediction.
The base case is a tidy grind. Bitcoin continues to trade within the contested range of $60,000 to $69,000, with intraday volatility but no definitive break.
February ended in the red, making a five-month losing streak official and the market treating the move as a reset rather than a collapse.
This will require ETF outflows to continue to slow, physical selling pressure to ease, and options markets to remain defensive barring another spike in volatility.
The bare case is a mechanical flash. A break below the $60,000 demand zone will trigger a stop loss and an organized sell, moving the price to the $58,000 test.
If the 200-week EMA fails to attract enough demand, focus will shift to deeper cost-based anchors in the mid-$50,000s.
In this scenario, the catalyst is not necessarily a cryptocurrency-specific shock. It’s the continued hemorrhage of ETFs, declining risk sentiment across markets, and the derivatives market, which continues to pay the price for downside protection.
The bullish case is flow-driven paybacks. Bitcoin maintains its current demand zone, ETF flows stabilize and then turn positive, and options skew begins to normalize.
That would allow prices to return to higher on-chain average levels in relation to more expansive situations.
In this setup, the streak ends not because sentiment initially improved, but because the marginal buyers returned.
(Tag translation) Bitcoin
