Bitcoin’s bear cycle looks familiar and that might be the bullish case

Bitcoin’s latest decline may look alarming, but market research suggests the current downturn is still broadly following the pattern seen in previous Bitcoin cycles.

BTC has dropped from its October record of roughly $126,080 to the low-$60,000 range, cutting its value by nearly half from the peak. The decline has weighed heavily on market sentiment and raised questions about whether the current cycle has entered a deeper bear phase.

However, research from VanEck and blockchain analytics firm CryptoQuant suggests the sell-off may be part of Bitcoin’s familiar four-year cycle rather than a complete breakdown of its long-term market structure.

Bitcoin’s current decline follows a familiar cycle

According to a Thursday report from asset manager VanEck, Bitcoin’s current weakness is broadly consistent with the historical halving cycle.

Bitcoin’s block rewards are periodically cut in half through programmed halving events. This reduces the amount of new BTC entering circulation and has historically played an important role in the cryptocurrency’s market cycles.

After major rallies, Bitcoin has also experienced significant corrections and extended periods of weakness. VanEck’s view is that the current downturn may therefore represent another phase of that recurring pattern rather than something fundamentally different.

The nearly 50% decline from the record high has certainly damaged sentiment, but historical drawdowns show that large corrections are not unusual for Bitcoin.

VanEck sees early signs of a possible bottom

VanEck is also tracking Bitcoin through its GEO framework, which looks at three areas:

• Global Liquidity
• Ecosystem Leverage
• On-Chain Activity

Two of the three signals are currently considered neutral, while ecosystem leverage remains in constructive territory.

The combination does not confirm that Bitcoin has reached its final low. However, VanEck believes the readings show early signs that a bottom could be developing.

That has led the firm to suggest that investors may want to begin scaling into positions rather than waiting for a perfectly timed market bottom.

Still, the framework does not remove the risk of further downside. Bitcoin can remain under pressure even when some market indicators begin to improve.

Long-term Bitcoin holders are feeling the pressure

Separate research from CryptoQuant provides another reason for both optimism and caution.

CryptoQuant analysts examined adjusted Net Unrealized Profit/Loss, or NUPL, which measures the unrealized gains and losses held across the Bitcoin market.

The latest data shows that long-term Bitcoin holders are carrying deeper unrealized losses than the market overall.

That is significant because long-term holders are generally viewed as one of Bitcoin’s more resilient investor groups. These investors have historically been more willing to hold through large market declines rather than sell at the first sign of weakness.

CryptoQuant analyst MorenoDV noted that a similar relationship has appeared around previous major Bitcoin cycle bottoms.

In other words, when long-term holders begin experiencing unusually heavy unrealized losses, the market may be moving closer to a major low.

The bottom may not be in yet

Despite the similarities with previous cycles, CryptoQuant is not calling a definitive bottom.

Historical data shows that the long-term-holder NUPL measure has fallen considerably further during previous cycle lows. Current levels have not yet reached those more extreme readings.

That leaves open the possibility of another sharp sell-off before Bitcoin finds a lasting floor.

A final capitulation event could push weaker holders out of the market and create another significant decline before conditions stabilize. On the other hand, stronger institutional demand and a more resilient holder base could allow Bitcoin to form a bottom without repeating the full severity of previous cycles.

This is where the current cycle could differ from earlier ones.

What happens next for Bitcoin?

Bitcoin’s next major move will likely depend on whether demand can absorb continued selling pressure.

The bullish case is that the current decline has already removed much of the excess leverage and speculative positioning built during the previous rally. If long-term holders remain resilient and institutional demand strengthens, BTC could potentially establish a floor without another major capitulation.

The bearish case is that the current decline has not yet reached the extremes historically associated with cycle bottoms. If selling accelerates, Bitcoin could face another leg lower before a sustainable recovery begins.

For now, neither scenario has been confirmed.

What this means for Bitcoin investors

The latest research paints a mixed but potentially constructive picture.

Bitcoin’s decline from roughly $126,080 to the low-$60,000s looks severe, but VanEck argues that the move remains consistent with the cryptocurrency’s historical cycle structure. At the same time, its GEO framework shows two neutral signals and one constructive signal, offering early evidence that market conditions could be stabilizing.

CryptoQuant’s data adds another potential bottom signal, with long-term holders experiencing deeper unrealized losses than the broader market. Yet those losses have not reached the extreme levels seen around some previous cycle lows.

That means Bitcoin may be approaching a bottom, but the data does not rule out another sharp decline.

The key question now is whether this cycle follows the deeper capitulation pattern of the past or forms a less severe bottom as institutional demand and long-term holders provide stronger support.

For investors, the next phase of Bitcoin’s cycle may be less about predicting the exact bottom and more about watching whether these early stabilization signals strengthen or deteriorate.