Bitcoin's Five Week Losing Streak and the $40,000 Put Nobody Wants to Discuss

Bitcoin just posted something it hasn't done since 2022. Five straight weeks of losses. Down over 50% from its October high near $126,500, sitting around $66,000, and the options market is telling a story that should make everyone pay attention.

But it's not all doom. And that's what makes this moment so interesting.

The RSI Signal That's Only Happened Twice Before

Bitcoin's 14 day Relative Strength Index just dropped below 30. That's happened exactly three times in BTC's entire history. The first was January 2015, when bitcoin sat around $200. It consolidated for about eight months, then ripped higher. The second was December 2018, near $3,500. Three months of sideways, then a sustained breakout.

So we're in rare territory. Like, historically rare.

I'm not saying this guarantees a bottom. It doesn't. But every time we've seen this reading before, it marked a point where sellers had basically exhausted themselves. The question isn't if there's a bounce coming. It's how long we grind sideways before it happens.

If history repeats, we're probably looking at consolidation around $60,000 for the next few months. Not exciting. Not apocalyptic. Just a slow, boring grind that shakes out the weak hands.

The $40,000 Put Nobody Wants to Discuss

Here's where it gets uncomfortable. The $40,000 bitcoin put option has become the second largest position by open interest heading into the February 27 expiry. We're talking roughly $490 million in notional value parked at that strike.

Let that math sink in. Bitcoin is at $66,000 and there's nearly half a billion dollars betting it could drop to $40,000. That's a 40% decline from here.

Now, do I think BTC actually hits $40K? Probably not. These deep out of the money puts typically function as insurance, not predictions. Big players buy them the same way you'd buy fire insurance on your house. You don't expect it to burn down, but you sleep better knowing you're covered.

Still, the sheer size of this position tells you something. Institutional traders aren't just hedging against a 10% pullback. They're preparing for a scenario that would be catastrophic. And when smart money buys that kind of protection, retail should at least notice.

The total options picture is more balanced than you'd think. About 63,500 call contracts versus 45,900 puts, with a put to call ratio of 0.72. Bulls still outnumber bears. But the concentration of put open interest at lower strikes shows that even the optimists are wearing seatbelts.

What's Driving the Pain

Three things are compounding right now.

First, geopolitics. The U.S. has assembled its largest concentration of air power in the Middle East since the 2003 Iraq invasion, according to the Wall Street Journal. Polymarket gives a 27% chance of strikes on Iran by month's end. That kind of uncertainty sends the dollar higher and risk assets lower. The dollar index hit 97.7, its highest since early February, and crude jumped from $62 to $65 in a single session.

Second, the Fed. Rate cut expectations keep getting pushed further out. A stronger dollar and higher oil prices mean tighter financial conditions. Crypto doesn't do well in that environment.

Third, ETF flows are flashing red. Bitcoin spot ETFs lost $133.3 million in a single day. BlackRock's IBIT shed $84 million. Fidelity's FBTC dropped $49 million. Ethereum funds lost $41.8 million. Even XRP ETFs bled $2.2 million. Institutions aren't buying the dip. They're trimming.

The Solana Exception

But here's the plot twist. While everything bled, Solana ETFs pulled in $2.4 million in fresh inflows. Not a massive number. But when every other crypto ETF is hemorrhaging cash, any positive flow stands out.

Bitwise's BSOL led with $1.5 million in new capital. Cumulative Solana ETF inflows have now hit nearly $880 million. SOL itself is down about 2% at $80, so it's not like the token escaped the broader selloff. But institutional money is choosing to add SOL exposure while dumping BTC and ETH.

This looks like rotation, not exit. Big money isn't leaving crypto. It's picking winners within the space. And right now, Solana is getting the nod.

The UAE Is Quietly Stacking

While Western traders panic, the United Arab Emirates is doing something clever. The country's mining operations, linked to Abu Dhabi's royal family, are producing about 4.2 BTC per day. They've mined 6,782 bitcoin so far, worth roughly $454 million, and they're sitting on an estimated $344 million in unrealized profit.

Unlike the U.S. government, which mostly gets its bitcoin through seizures, the UAE is building a strategic reserve by actually mining and holding. Marathon Digital runs a 250 megawatt facility there. This isn't a hobby. It's sovereign strategy.

When a nation state mines bitcoin at scale and refuses to sell during a 50% drawdown, that tells you more about long term conviction than any analyst's price target ever could.

What Comes Next

I think we're in for a few months of frustration. The RSI signal points to consolidation. The options market is braced for downside. ETF flows are negative. Macro conditions aren't improving anytime soon.

But here's what I keep coming back to. Every time bitcoin's RSI has fallen this low, it marked the beginning of the end for sellers. Not the beginning of a crash. The beginning of a bottom.

The $60,000 region is where I'd expect us to settle. Maybe we dip below it briefly. Maybe we chop between $58K and $68K for weeks. It won't be fun to watch. But if 2015 and 2018 taught us anything, it's that the boring part usually comes right before the interesting part.

The smart money is hedging, not fleeing. Solana is attracting fresh capital. The UAE is mining and holding. These aren't the behaviors you see at the start of a real bear market. They're the behaviors you see in a correction that's running out of steam.

Don't panic. But don't get complacent either. The next few months will test everyone's patience. And honestly, that might be the point.