Strategy’s Bitcoin holding cost is rapidly diverging from the current market price. According to the latest estimates, its unrealized losses have deepened since the fourth quarter of last year, at one point surpassing the $5 billion mark.
Bitcoin’s price has dropped more than 35% since peaking above $126,000 in October 2025. This steep correction is shaking market confidence in the traditional "four-year halving cycle."
Market Turbulence
The Bitcoin market is facing a severe test, with persistent price declines prompting a reevaluation of established cycle theories. According to Gate platform data, as of February 5, 2026, Bitcoin’s price has fallen to around $69,000.
This price level has dealt a significant blow to publicly listed company Strategy, which holds a large amount of Bitcoin. Data shows that as of January 25, Strategy held a total of 712,647 BTC, with an average holding cost of approximately $76,037 per coin.
Between January 20 and 25, Strategy added 2,932 BTC at an average price of about $90,000. Currently, Bitcoin’s price is nearly 10% below its average holding cost line.
Cycle Conundrum
The "four-year cycle" theory for Bitcoin is facing unprecedented challenges. After the 2024 halving, the market did not deliver the sustained bull run many expected.
Historically, Bitcoin posted annual gains of 5,500%, 1,300%, and 60% in the years following the 2013, 2017, and 2021 halvings, respectively. However, Bitcoin closed 2025 down by about 6% for the year.
This anomalous performance marks the first fundamental crack in the traditional cycle model. Analysts believe that the weakening of cycle effects reflects inevitable structural changes in the Bitcoin market.
In the past, retail investors and early adopters dominated the market, and supply reductions from halving events had a direct impact on supply-demand dynamics. Today, institutional investors hold significant amounts of Bitcoin via ETFs and other vehicles, altering the market’s response mechanisms.
Structural Shifts
Changes in market structure are a key reason for the breakdown of traditional cycle models. The emergence of U.S. spot Bitcoin ETFs and similar institutional products has locked up large quantities of Bitcoin in long-term portfolios.
This has diminished the direct impact of halving events on circulating supply. At the same time, Bitcoin’s market capitalization has surpassed $1.5 trillion, so each halving’s absolute reduction in supply has a shrinking effect on the overall market.
Macroeconomic factors have become the primary drivers of Bitcoin’s price. As a trillion-dollar global macro asset, Bitcoin’s price movements are increasingly correlated with Federal Reserve policy and global dollar liquidity.
The sharp sell-off in early February 2026 is widely attributed to heightened Middle East tensions and a stronger U.S. dollar—major macro risk events. Data shows that on February 1 alone, over $2.5 billion in long positions were liquidated across the network.
Market Divergence
The current market is showing clear signs of divergence. On one hand, large holders like Strategy are under intense pressure; on the other, different market participants are behaving in markedly different ways.
On-chain data reveals that smaller addresses holding fewer than 10 BTC continue to sell, while "whale" addresses with more than 1,000 BTC are quietly accumulating.
Whale holdings have rebounded to their highest levels since the end of 2024, indicating that long-term, steadfast holders are absorbing panic-driven sell-offs.
Gate platform’s market observations show that despite overall market pressure, certain niche sectors remain active. Projects like Hyperliquid (HYPE), which focus on precious metals contract trading, have continued to see strong capital inflows recently.
Outlook
The Bitcoin market may be transitioning from cyclical volatility to a more mature market structure. Declaring the four-year cycle "over" may be premature, but it is certainly "evolving."
Looking ahead, the market may exhibit three main characteristics: longer cycles, systematically lower volatility, and increased influence of macroeconomic factors.
As market capitalization grows and institutional participation deepens, Bitcoin’s volatility may gradually decline, with less dramatic price swings and longer cycle durations.
Investors will need to pay closer attention to global macroeconomic trends and monetary policy—not just the countdown to the next halving. Key indicators will include Federal Reserve interest rate decisions and the scale of fiscal deficits.
Even during periods of consolidation or downturn, new protocols and applications will continue to generate independent trends in niche sectors. Market participants should focus more on structural opportunities rather than relying solely on cyclical forecasts.
Conclusion
Attention is now centered on Bitcoin’s next major support level. The $77,000 mark is not only Strategy’s average holding cost line—it may also serve as a critical test of market confidence.
If Bitcoin falls below this level and continues downward, more leveraged positions could face liquidation, further intensifying market volatility. Meanwhile, continued accumulation by whales stands in stark contrast to retail selling.
The narrative around the four-year halving cycle is being reexamined, and traditional models can no longer fully explain current market behavior. As Bitcoin’s ties to global macroeconomics deepen, price movements will become increasingly complex and multifaceted.
This market adjustment may not signal the end of the cycle, but rather the beginning of a new chapter—one shaped by institutional capital, macroeconomic forces, and ongoing innovation, as the digital asset market matures.
