The conversation around Bitcoin's current market status has shifted dramatically. What was once cautiously whispered is now being openly declared: Bitcoin is in a bear market. Analysts like Julio Moreno of CryptoQuant and Matt Hougan at Bitwise are leading a chorus of institutional voices in using the term more freely than at any point since early 2023. Yet, this declaration comes with a perplexing twist: many of these same institutions are simultaneously holding or even adding to their exposure. This creates a fascinating contradiction, challenging our traditional understanding of what a bear market truly entails.
If a bear market no longer signifies outright capitulation and exodus, what does it mean for Bitcoin? And with major players like VanEck, K33 Research, and 21Shares arguing that the famed four-year cycle is now defunct, how long should we expect a bear market to last when the old calendar no longer applies?
Defining Bitcoin's Current Bear Market
To understand Bitcoin's current state, we can start with the traditional finance definition. The US Securities and Exchange Commission defines a bear market as a broad index falling 20% or more over at least two months. Bitcoin has comfortably cleared this threshold. From its early October 2025 peak above $126,000, BTC has experienced a substantial decline of roughly 41%, settling around $74,000 as of February 3. By this headline standard, the case for a bear market seems closed.
However, many crypto analysts view this 20% benchmark as “somewhat arbitrary” for the digital asset space, where 20% swings can occur without necessarily signaling a fundamental regime change. In practice, industry experts rely on a more nuanced, three-part dashboard to assess market health:
- Price Trend: This is the most visible indicator. CryptoQuant heavily relies on the 365-day moving average as a key boundary. Bitcoin currently trades below this crucial level, which stands around $101,448. Their Bull Score Index, a comprehensive measure of on-chain health, has plummeted to 20 out of 100, firmly placing it in what they describe as 'extreme bear territory'. Similarly, Coinbase has utilized the 200-day moving average in its past cycle analyses to identify bear regimes, a threshold Bitcoin also remains below.
- Positioning and Derivatives: This signal reveals how traders are positioning themselves. Recent Glassnode reports highlight a clear rotation towards downside protection, a bearish skew in options markets, and conditions that heighten downside sensitivity, such as dealer gamma falling below zero. When market participants are willing to pay premiums to hedge against further declines, rather than to profit from potential upside, it's a strong sign of defensive market behavior.
- Demand and Liquidity: These factors provide the structural backdrop. CoinShares estimates a significant outflow of approximately $29 billion in Bitcoin from large holders since October. Digital asset exchange-traded products (ETPs) have also seen year-to-date outflows nearing $440 million. CryptoQuant and MarketWatch characterize the current environment as one of weak demand coupled with contracting stablecoin liquidity, which are classic hallmarks of a bear market.
The latest global investor survey conducted by Coinbase Institutional and Glassnode, spanning December 2025 to January 2026, revealed that 26% of institutions now describe the market as being in a bear phase, a significant jump from just 2% in the previous survey. Yet, the same survey delivered a powerful paradox: 62% of these institutions held or increased their net long exposure since October, and a remarkable 70% still view Bitcoin as undervalued. This disconnect is the defining characteristic of the 2026 bear market. It's not about capitulation; it's about acknowledging a regime shift while strategically maintaining exposure. The label 'bear market' is evolving to be less about who is fleeing and more about who is still accumulating, even amidst prevailing negative sentiment.
When Does This Bear Market End? The Three Triggers
Defining the conclusion of a bear market requires moving beyond mere sentiment to identifying a concrete regime shift. Analysts point to three practical triggers that signal the end:
- Trend Reclamation: This occurs when Bitcoin decisively reclaims and holds above long-term moving averages, such as the 200-day or 365-day, for several consecutive weeks.
- Demand Inflection: This means a shift in exchange-traded fund (ETF) and ETP flows from subdued or negative to sustained positive inflows, alongside a noticeable slowdown in large-holder distribution.
- Risk Appetite Normalization: The options market skew returns to balanced levels, indicating less demand for costly downside protection and a sustainable rebuilding of leverage within the market.
Analysts cluster their forward-looking scenarios into three distinct time horizons, each supported by specific expert commentary:
Scenario 1: The Classic Crypto Winter
This path, outlined by Julio Moreno, suggests an extension of the bear market through mid or late 2026. Moreno has identified potential deeper paths for Bitcoin, possibly reaching $70,000 over three to six months, and even $56,000 in the second half of 2026. This scenario assumes that demand remains weak, capital flows stay negative, and Bitcoin repeatedly fails to reclaim its key moving averages. Bear market rallies might occur, but they ultimately fail to sustain momentum.
Scenario 2: A Shorter, Shallower Bear
CoinShares explicitly anticipates a choppy period lasting three to six months, characterized by range-bound price action and capped upside, followed by improving conditions in the latter half of 2026. In this framing, the bear market is less about extreme price depth and more about duration. It's a regime where upside is constrained until demand definitively reverses, but a strong floor of institutional buying prevents catastrophic declines.
Scenario 3: The Liquidity-Wave Regime
This scenario treats the bear market as a liquidity-driven event, rather than one tied to a calendar-based cycle like the halving. The bear market ends when demand and liquidity re-accelerate, irrespective of the halving clock. This perspective aligns with CryptoQuant's demand-led framework and actively moves away from the deterministic view of the halving cycle, acknowledging that the old playbook may no longer apply.
"The disconnect is the defining feature of the 2026 bear market. It's not about capitulation—it's about regime recognition while maintaining structural exposure."
Is This Bear Market Different? The End of the Four-Year Cycle
The current drawdown of approximately 40% is notably smaller compared to the stereotypical 70% plus crypto winters of prior cycles. While analysts' downside scenarios still cluster around the $55,000 to $60,000 range, implying a total drawdown closer to the mid-50% mark, this would still be less severe than historic extremes. Yet, it would be meaningful enough to qualify as a bear market by any standard.
The market also appears increasingly bifurcated. Bitcoin maintains its structural leadership, while much of the broader crypto market performs considerably worse. The Coinbase and Glassnode report emphasizes this through dominance metrics and defensive positioning behavior, indicating a K-shaped market where the 'bear market' may affect different asset classes unevenly.
Crucially, there's a growing consensus that the four-year cycle is over. VanEck argued in 2025 that the cycle had broken, rendering the old playbook less reliable. K33 Research published a report titled "4-year cycle is dead, long live the king," explaining the regime change. 21Shares describes the cycle as evolving, potentially extending to five years, as liquidity waves lengthen and institutional participation deepens.
What replaces the traditional four-year clock is a "liquidity-and-flows clock." This new framework incorporates real yields, global liquidity impulses, flows from exchange-traded funds and products, stablecoin liquidity, and hedging demand. CoinShares explicitly frames Bitcoin's recent dislocation in terms of its relationships with precious metals and broader macro liquidity. Coinbase and Glassnode highlight a defensive derivatives posture as a real-time regime indicator.
The implication for bear market duration is significant: bear markets may become more frequent but less severe. Instead of prolonged, existential crypto winters, the market may experience more frequent, yet shallower, regime drawdowns, thanks to institutional flows potentially providing a floor. Rallies can still fail until demand and liquidity turn positive, but the underlying structural support may prevent the kind of multi-year capitulation that defined past cycles. This creates a paradox: the bear market might last longer in calendar time but inflict less damage in percentage terms. Alternatively, it could end sooner if demand inflects before the old cycle logic would predict. Either way, the clock that governed Bitcoin for a decade is no longer the dominant force.
The Checklist, Not The Calendar
In 2026, identifying a bear market isn't about a single metric, but rather a comprehensive checklist. Broken trends, increasing hedging demand, and a rollover in demand and liquidity all point in the same direction. Bitcoin is indeed in a bear regime according to most relevant frameworks. When it concludes will depend less on the halving calendar and more on the precise timing of the demand cycle. CoinShares anticipates three to six months of choppy action, while CryptoQuant sees the potential for deeper lows in the second half of the year. Both perspectives could prove correct at different moments if the market oscillates rather than resolving cleanly.
The four-year cycle may be a relic of the past, but the question of when this bear market ends is far from unanswerable. It will conclude when Bitcoin reclaims its long-term moving averages, when institutional flows turn sustainably positive, and when options markets cease pricing predominantly for protection. Until these signals flip, the market remains in a regime where upside is capped, and patience is a crucial virtue, even as institutions continue to accumulate while labeling it a bear market.
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