NYDIG’s latest research report paints a difficult picture for bitcoin in 2026, with the asset falling 13.4% in Q2 after a 22.6% drop in Q1, bringing its year-to-date return to -32.9%.
What stands out is that this weakness came while broader risk markets rallied hard.
A bitcoin-specific drawdown
Technology equities gained 43.5% and the Nasdaq 100 rose 27.7% in the same quarter bitcoin fell, reinforcing that the decline was bitcoin-specific rather than a broad risk-off event.
Analyst Greg Cipolaro pointed to supply concerns around digital asset treasury companies (DATs) and tighter liquidity expectations under new Fed Chair Kevin Warsh as the main culprits.
Bitcoin is now down 54.3% from its $126,000 all-time high set on October 6, 2025, reaching $57,717 on July 1. The drawdown has extended to 268 days.
The cycle framework returns
The report leaned heavily on the four-year cycle narrative, noting the two most recent major drawdowns lasted 363 and 376 days with trough depths of -84.3% and -77.6%:
“A repeat of that duration profile with a narrower -70% drawdown… would imply a potential cycle low near $38K–$39K around early October.”
On-chain metrics reinforce an incomplete reset:
“Several cyclical indicators (MVRV, PSIP, aSOPR, LTH SOPR) still above the trough levels that have historically marked durable bitcoin bottoms.”
Strategy flips from buyer to seller
The biggest bitcoin-specific shift was Strategy (MSTR) unveiling its Digital Credit Capital Framework, authorizing roughly $1.25B of BTC sales while raising the STRC dividend to 12%:
“That changed the narrative from one-way accumulation to active balance-sheet management.”
On flows, U.S. spot ETFs posted $4.9B of net outflows, though the new Morgan Stanley Bitcoin Trust bucked the trend with $364.8M of inflows:
“That launch demonstrates that distribution still matters.”
Derivatives are also flashing warnings, with positive funding and rising open interest near cycle lows:
“Long-skewed leverage is being rebuilt… before spot demand has confirmed a recovery.”
