Bitcoin may avoid historic bear market losses as ETF flows grow, says analyst

Bitcoin (BTC) is currently down 36% from its all-time high at $126,000, but one analyst claims that BTC’s fourth bear market has “materially decoupled” from previous bearish cycles, due to exchange-traded fund (ETF) inflows and corporate BTC accumulation.

Bitcoin ETF flows and treasury buys may limit further downside

Bitcoin Bond Company CEO Pierre Rochard compared Bitcoin’s drawdowns across previous market cycles and said the current correction looks different from the past bear markets. The 2013–2015 cycle wiped out roughly 85% of Bitcoin’s value, while the 2017–2018 and 2021–2022 cycles saw declines of nearly 77% before the price bottomed.

The current dip has been relatively smaller. Bitcoin fell to around $60,000 from its all-time high near $126,000, marking a decline of about 52%.

Bitcoin drawdown analysis across different market cycles by Pierre Rochard. Source: X

Rochard explained that Bitcoin ETFs have become a new source of demand over the past two years. US-listed spot Bitcoin ETFs have recorded cumulative net inflows of more than $59 billion since launch, including $4.5 billion since March.

Corporate Bitcoin buying has also picked up. Strategy increased its Bitcoin holdings to 818,869 BTC from 640,031 BTC in October 2025, adding nearly 179,000 BTC. The company’s average purchase price is around $75,543.

Strategy BTC holdings. Source: bitcointreasuries.net

According to Rochard, ETF investors and corporate treasury firms are now providing consistent demand that did not exist during the 2018 and 2022 bear markets.

MN Capital founder Michaël van de Poppe agreed that the current market environment no longer resembles the 2022 cycle. Van de Poppe said,

“The most overcrowded thesis right now is that Bitcoin makes a bear flag and that we're going to bottom out in October '26.”

Van de Poppe pointed to several factors that make this cycle different, including fresh Nasdaq highs at 29,372 on Monday, the upcoming legislative vote on the CLARITY Act, discussions around a strategic Bitcoin reserve, and the appointment of a new Federal Reserve chair.

Related: Bitcoin funding rates turn positive: Is BTC rally to $85K next?

BTC retail demand starts recovering

Crypto analyst MorenoDV noted that Bitcoin recently flashed its first “early bull” signal since March 2023 using CryptoQuant’s Bull-Bear Market Cycle indicator. The indicator tracks whether the market is shifting toward a bullish or bearish phase by analyzing price momentum and moving averages.

Bitcoin bull-bear market cycle indicator. Source: CryptoQuant

MorenoDV said similar signals appeared in 2019 and early 2023 before Bitcoin rallied 1280% and 461%, respectively. However, the latest signal still needs stronger price confirmation. MorenoDV said,

“Several other market metrics are already showing signs of exhaustion. That makes this signal less clean than a classic early-cycle confirmation.”

Onchain data also showed signs that smaller investors are returning to the market after activity dropped throughout April. Bitcoin researcher Axel Adler Jr. tracked the 30-day change in Bitcoin transaction volume from wallets holding between $0 and $10,000, which is often used to measure the retail investor participation.

Bitcoin retail investor demand. Source: Axel Adler Jr

The metric dropped to -8.2% on April 5 before recovering into positive territory later in the month. It reached 6.31% on May 6 and remained near 4.38% on May 12 while Bitcoin traded at $80,625.

The retail transfer volume increased slightly to $351 million from $336 million in mid-April. However, Adler Jr. said the activity remains below February levels, when volumes ranged from $365 million to $375 million. 

As Cointelegraph reported, there are increasing signs that the early stages of a new bull market are underway.

Related: Strategy resumes Bitcoin acquisitions with $43M BTC buy