There have been many suggestions for making it so losing your login streak is less punishing, but I don’t think anyone has posted this specific suggestion yet. Hopefully it’s not a duplicate.
My suggestion is; If you weren’t able to login for one day, then your login streak should be pushed back by two, three or even five days. But if you don’t login for a second day in a row, then your login streak should reset back to 0.
This will remove some of the pressure and anxiety for having to login every single day for a whole year if you want the Time Owl costume.