NYDIG has published a research report arguing that bitcoin’s current cycle contraction is far from complete, with the drawdown from the all-time high sitting at roughly 52% and key capitulation signals still absent.
The firm’s analyst Greg Cipolaro revisited NYDIG’s Bitcoin Cycles Narratives Framework, introduced last November, and found it has tracked the market accurately through each phase:
“We are mid-contraction with the reset still ahead.”
Prior contractions ran much deeper
NYDIG noted that previous bitcoin bear markets produced 75% to 85% peak-to-trough drawdowns, and the markers of a completed contraction have not appeared:
“No long-term-holder capitulation, no terminal insolvencies, and no reset. We have not moved on to Reconstruction and Reframing.”
The report flagged that Strategy made its first-ever bitcoin sale, alongside record ETF outflows and DAT mNAV inversion, as reversal markers already in place.
ETF and corporate demand are fading
Two pillars of bitcoin’s 2025 rally — spot ETF inflows and corporate treasury accumulation — have weakened materially in 2026.
At their peak, these buyers absorbed over 48,000 BTC in a single week, driving bitcoin above $126,000 in October 2025:
“Absent a renewed wave of corporate treasury adoption or a sustained return of ETF inflows, bitcoin is unlikely to receive the same magnitude of mechanical buying support that characterized much of 2025.”
Corporate buying has narrowed almost entirely to Strategy, while some public mining companies have become net sellers.
Summer seasonality adds another headwind
NYDIG’s seasonal analysis showed that August and September are historically bitcoin’s weakest months, with both average and median returns negative:
“For a market already in contraction, seasonality represents an additional headwind.”
