Bitcoin poised for its fourth consecutive month of losses, with the $81,000 support level becoming crucial.

Bitcoin is facing challenges in avoiding a fourth straight monthly decrease as the cryptocurrency market undergoes a significant shift in momentum, leaving many investors in a precarious position.

Data from CryptoSlate reveals that the leading digital asset fell by nearly 7% in the past 24 hours, bringing its price down to $82,513.

According to statistics from CoinGlass, long traders betting on the BTC price faced liquidations exceeding $750 million during the sudden price drop. This marks the highest level of losses for this group of traders since last November.

Bitcoin Price Liquidation in the Last 24 Hours (Source: CoinGlass)

As a result, BTC is on track to endure its fourth consecutive month of losses, having lost more than 5% of its value this January.

This follows a 3.99% decline in December and a sharp 17% drop in November, with BTC also dipping by 4% in October.

BTC falls below 2-year moving average

Meanwhile, the lackluster price performance this year has caused the flagship digital asset to dip below its 2-year moving average for the first time since 2022.

Bitcoin analyst Joe Consorti mentioned:

“We've also lost the November 2025 lows and are 7% away from losing the 2025 yearly low.”

Data from Alphractal underscores the importance of this shift, noting that the last instance BTC traded below this level was in October 2023.

Bitcoin 2-Year Moving Average (Source: Alphractal)

This breakdown brings back a straightforward yet historically significant signal. For many analysts, the breach of the 2Y SMA indicates the onset of a genuine capitulation cycle.

Historical evidence suggests that nearly every time Bitcoin’s price has dipped below this average, the market has experienced further declines or entered a prolonged accumulation phase, setting the stage for the next bull run.

The October liquidation shock reset the cycle

The current phase began on October 10, 2025, when the crypto market witnessed one of its largest forced unwinds ever.

A wave of liquidations followed renewed tariff and export-control news from Washington, prompting swift deleveraging across major platforms and decreasing market depth in the subsequent days.

Bitcoin had reached an all-time high above $126,000 earlier that month, but the liquidation event disrupted the market’s previous structure and recalibrated risk around macroeconomic news rather than internal crypto factors.

The liquidation wave totaled over $19 billion, highlighting how much of the cycle’s upward movement had been fueled by leverage rather than sustainable spot demand.

This shift is significant because the market did not deliver the rapid, confidence-restoring rebound that typically indicates a return to trend.

Instead, price movements evolved into a slow process of position unwinding, with recoveries consistently stalling and reinforcing the notion that the market has transitioned from expansion to consolidation.

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ETF flows stabilize, but the bid has not rebuilt

The most apparent indicator of the demand slowdown has been observed in US spot Bitcoin ETFs, which previously fueled earlier accumulation phases but have recently adopted a more neutral stance.

Glassnode reported that net flows for US spot Bitcoin ETFs have returned to balance, with the 30-day moving average hovering around zero following a period of consistent outflows.

This shift suggests that mechanical selling pressure has diminished, but it also indicates that the aggressive inflows that once absorbed new supply have yet to return.

Furthermore, Glassnode characterized the market as being pinned near cost-basis levels, which now act as critical inflection points. The firm identified the short-term holder cost basis at approximately $96,500, a level that has repeatedly hindered recovery attempts.

Below the market, Glassnode pointed out a stressed support band around $83,400, with a “True Market Mean” near $80,700 if weakness persists.

Alphractal CEO Joao Wedson issued a stark warning regarding this specific area, asserting that Bitcoin “cannot lose $81,000 under any circumstances” based on on-chain analysis.

Bitcoin Mean Price (Source: Alphractal)

Wedson cautioned that if this level is breached, a capitulation process akin to 2022 could unfold, with the next significant support level considerably lower at around $65,500.

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Metals surge, and Washington injects policy risk

The internal cooling of crypto has coincided with a macro environment that has favored traditional safe havens.

Gold and silver achieved new highs in early 2026 as investors shifted towards hard assets amid policy uncertainty and geopolitical risks, contrasting sharply with Bitcoin’s sideways-to-downward trend.

Washington has also influenced price movements. Senators introduced a draft market-structure bill in mid-January to clarify oversight and establish guidelines for key products, including restrictions on interest-like rewards for stablecoin holdings while still permitting activity-based incentives tied to usage.

However, the immediate issue is that policy advancement has been inconsistent.

After the draft circulated, Coinbase’s CEO, Brian Armstrong, stated the company could not endorse the bill in its then-current form, delaying crucial Senate discussions and heightening investor caution regarding timelines.

In light of this, Bitwise CIO Matt Hougan remarked that the legislative outcome presents two distinct paths for pricing.

“If Clarity passes … I suspect the market will rally sharply,” he stated, contending that a framework investors can support would accelerate expectations regarding stablecoins and tokenization.

Conversely, Hougan noted that if the legislation fails, the market is more likely to seek evidence of real-world adoption before rewarding prices.

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A leverage-driven market, with liquidity signals flashing caution

Even amid subdued price movements, some analysts contend that the drawdown resembles a cyclical reset rather than a structural collapse.

Glassnode characterized the consolidation phase as being driven more by absorption than expansion, with leverage already unwound in certain markets and spot participation remaining muted.

This perspective aligns with the broader notion that recent lows have often occurred due to leveraged positions being forced out, rather than a definitive collapse in long-term conviction.

Nevertheless, short-term liquidity indicators remain concerning.

One widely monitored measure, the Coinbase Bitcoin premium index, has remained negative for an extended period in January, at around -0.16% in recent readings, indicating that US spot pricing is weaker than the global average.

Coinbase Premium Index (Source: CryptoQuant)

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Simultaneously, the market’s reservoir of “dry powder” has shown signs of dwindling.

Data from CryptoQuant indicates a contraction in overall stablecoin supply, a trend that traders keep an eye on since stablecoin growth typically correlates with incremental buying power within the crypto ecosystem.

Putting it all together, the situation leaves the market with two clear paths that traders are already strategizing.

• The Bull Case: A gradual ascent fueled by a resurgence of sustained spot demand that can elevate prices above the $96,500 short-term holder cost basis.
• The Bear Case: A continuation of the consolidation phase, with downside risk concentrated around the $83,400-$80,700 range. However, if liquidity fails to improve and the $81,000 support identified by Alphractal is breached, defensive positioning could exacerbate the pullback toward the mid-$60,000 area.

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