Bitcoin closed the first quarter of 2026 at $66,619, down 23.8% from $87,508 on January 1 — its worst Q1 performance since 2018, when it fell 50% from $14,112 to $6,973.
A brutal six months
The Q1 drop extends a painful stretch that began in Q4 2025, when bitcoin slid 23% from $114,057 to $87,508.
Combined, bitcoin has shed roughly 41.6% of its value over the past six months, falling from its October 2025 all-time high.
The broader crypto market pulled back alongside traditional equities, with escalating geopolitical tensions in the Middle East weighing heavily on investor sentiment.
ETF outflows added pressure
Analysts pointed to a reversal in U.S. bitcoin ETF flows as a key driver of the decline.
Spot bitcoin ETFs saw $496.5 million in net outflows during Q1, with $1.8 billion leaving in the first two months before $1.32 billion returned in March.
Andri Fauzan Adziima, Research Lead at Bitrue, said the Q1 decline was driven “primarily by” ETF outflows, coupled with sticky inflation, a cautious Fed, and broader risk-off sentiment.
Long-term conviction remains
Despite the selloff, analysts say the fundamental case for bitcoin remains intact.
Min Jung, research associate at Presto Research, stated:
“There is limited evidence of a structural shift in long-term conviction around bitcoin. Institutional participation and adoption trends remain intact, suggesting the move has been more cyclical than fundamental.”
Nick Ruck, Research Director at LVRG, said reversing the trend in Q2 will require renewed ETF inflows, clearer progress on crypto-friendly U.S. regulations, and a shift toward easier monetary conditions.
