The recent recovery in Bitcoin’s price has reignited the debate within the cryptocurrency community regarding the current stage of the market cycle. A technical analysis suggests that the market is following a familiar pattern observed in previous bear markets, albeit at a slower pace and with increased institutional participation. Despite these changes, the analysis indicates that the downward trend is not yet complete.
Bitcoin’s Historical Patterns Resurface
The analysis posits that Bitcoin’s price movements adhere to a consistent emotional and structural framework across different cycles. This framework typically involves a parabolic surge, followed by a phase of distribution, a sharp decline, a temporary recovery, and ultimately, a final capitulation.
This pattern was evident in 2018 and 2022, and according to the current analysis, 2026 is mirroring the late-stage characteristics of previous cycles, albeit on a larger scale and with reduced volatility.
The timing aspect is crucial, supporting a bearish outlook for the months ahead. Historical data indicates that cycle bottoms typically form about a year after the all-time high, suggesting that Bitcoin’s price might still be in the early stages of a downward trend following the peak in October 2025 at $126,080.
Future Trajectory of Bitcoin
While technical analysis provides valuable insights, on-chain indicators, such as long-term holder stress and Net Unrealized Profit/Loss (NUPL), suggest that the market correction is incomplete.
NUPL, a metric from Glassnode, gauges the overall profit or loss position of investors. Major market turning points often coincide with extreme NUPL values, indicating widespread sentiment shifts. Therefore, a true cycle low may be yet to materialize, with investors potentially enduring further pain.
Additionally, CryptoQuant highlighted that despite increased institutional interest, Bitcoin spot demand remains subdued. This discrepancy implies that internal market strength has not aligned with external demand, which could prolong the price struggle.
Comparing Bitcoin’s previous bear markets, the 2017 and 2021 cycles witnessed substantial drawdowns of around 84% and 77%, respectively. With Bitcoin currently trading at $74,680, a 40.8% decline from the October peak suggests the potential for further downside. Historical trends indicate that a cycle bottom may materialize in late 2026.
Image Source: Getty Images, Chart Source: Tradingview.com
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