TLDR
- Bitcoin’s latest bear market saw a drawdown of about 55%, milder than the 70-80%+ crashes seen in past cycles.
- Analysts credit ETFs, institutional investors, and bitcoin’s growing market size for smoother price swings.
- A cost basis crossover between short-term and long-term holders has appeared for the fifth time in bitcoin’s history, a pattern some call a bull market signal.
- Spot bitcoin ETFs pulled in $2.06 billion over three trading days last week, including a single-day record of $999 million.
- Experts disagree on the exact cause, but most expect bitcoin’s future cycles to have smaller peaks and shallower crashes.
Bitcoin’s most recent bear market cycle brought a drawdown of roughly 55% from its October 2025 peak. That is a steep drop by most standards. But compared to bitcoin’s history, it was mild.
In the 2021-2022 cycle, bitcoin fell more than 75% after touching nearly $69,000. Earlier cycles saw drops of 80% or more. The pattern of extreme boom and bust appears to be softening.
Analysts point to a few reasons for the change. One is the arrival of spot bitcoin exchange-traded funds in January 2024.
How ETFs Changed Who Owns Bitcoin
Before ETFs existed, bitcoin ownership was dominated by retail traders and crypto-focused funds. These groups often held large portions of their portfolios in bitcoin.
ETFs opened the door for financial advisers and traditional investors. Many of these buyers allocate a small slice of their portfolio to bitcoin, often around 2%.
Bitwise research director Ryan Rasmussen explained that a 50% price drop hits these investors far less hard than someone holding a much larger allocation. This changes how the market reacts to price swings.
Rebalancing also plays a role. When bitcoin drops, advisers targeting a fixed allocation may buy more to restore that target. When bitcoin rises sharply, they may sell some to bring the allocation back down.
This behavior can cushion price crashes. It can also cap the size of rallies.
Not every analyst agrees ETFs are the main driver. Schwab’s head of crypto research, Jim Ferraioli, points instead to bitcoin’s size. The asset now carries a market capitalization near $2 trillion, meaning it takes far more capital to move the price by the same percentage it once did.
A Fifth Bull Market Signal Appears
Separately, a CryptoQuant analysis published a new data point that some are calling a bull market confirmation. The signal tracks the cost basis, or average purchase price, of short-term holders compared to long-term holders.
When the short-term holder cost basis rises above the long-term figure, it has historically marked a turning point. This crossover has now happened five times, including in 2012, 2015, 2019, and 2023.
The analyst behind the report, known as Darkfost, said the pattern adds credibility to a recovery he first flagged in July. He also noted there is always a margin for error in this kind of signal.
✅ Bull Market Confirmed.
After sharing with you that the end of the bear market was approaching with a signal given on July 11th, we now have the confirmation signal that the momentum has indeed shifted.
This is the 5th occurrence, which gives a bit more credibility to the… pic.twitter.com/wuwdUsAW5J
— Darkfost (@Darkfost_Coc) September 24, 2026
The measure excludes coins that have sat untouched for more than seven years, since those wallets are considered dormant rather than active.
Meanwhile, spot bitcoin ETFs saw strong demand last week. The funds took in $2.06 billion over three sessions, according to Farside data.
The largest single day was Sept. 21, when inflows hit $999 million, the biggest one-day total of 2026. Inflows then eased to $714.7 million and $346.9 million over the following two days.
CryptoQuant founder Ki Young Ju said in a Sept. 22 note that growing institutional ownership could lead to milder cycles going forward. He forecast bitcoin could see three to five times its current value this cycle, followed by a softer downturn than in the past.
