54% vs 90%: Why this Bitcoin drop has been “milder” than a typical bear market?

On July 10, 2026, according to Gate market data, Bitcoin (BTC) was trading at $64,034. The price is close to the cycle high of nearly $125,000 reached in October 2025, and it has so far retraced by about 54% in total.

A 54% drop is, in any prior Bitcoin cycle, enough to be seen as the beginning of a long bear market. But the Wall Street research firm Bernstein doesn’t think so. In a recent research note, the team led by analyst Gautam Chhugani said that the biggest decline in this cycle is around 54%, far below the 75% to 90% plunge typical of the late stages of past bear markets. Bernstein described this adjustment as the “mildest” Bitcoin bear market in history and maintained a target price of $150,000 by the end of 2026.

The gap between 54% and 90% is not only a numerical difference—it points to profound changes in the underlying structure of the crypto market.

How deep is the “pain benchmark” of historical cycles?

Looking back at past Bitcoin bear-market rounds, a clear pattern emerges: after the 2013 bubble burst, the 2018 top collapsed, and the deep decline following the 2022 FTX collapse, the maximum drawdown in each case was confined to the brutal 75% to 85% range. Specifically, the maximum drawdown in the 2018 bear market was about 84%, while in the 2022 bear market it was about 78%. For three rounds of bear markets triggered by major industry events—2014 to 2015, 2018 to 2019, and 2022 to 2023—the maximum drawdowns ranged from 76.7% to 83.6%.

Bernstein points out that only a 75% to 90% decline truly marks the end of a bear-market cycle—drawdowns that erased the 2013 bubble, the 2018 top, and even the post-2020 rally. If we estimate using a historical 75% retracement, Bitcoin would fall from a $125,000 peak to roughly $31,000.

In this cycle, however, the drawdown from the peak is about 54%. As of June 25, it hit a low of about $58,115. Although this drop is still a heavy blow for investors who chased longs near the highs, in historical terms it looks more like a deep mid-cycle adjustment rather than a signal that the bull-to-bear transition has reached an endpoint.

How “institutionalization” changes the slope of declines

The most direct explanation for the narrowing drawdown is structural changes among market participants.

In previous bear-market cycles, the market was dominated by retail investors. When panic sets in, retail tends to cluster and sell irrationally, causing prices to fall off a cliff. In this cycle, the level of participation by institutional capital is no longer comparable. Juan Leon, a senior investment strategist at Bitwise, said the current decline is Bitcoin’s “most mild” bear market on record, with the bottoms of each cycle rising; marginal holders are shifting from retail speculators to professional asset allocators.

The suppression of drawdowns from institutionalization shows up on two fronts. First, spot Bitcoin ETFs bring in massive long-term holdings; these funds have far lower turnover than retail, significantly reducing selling pressure. Second, institutions make decisions differently from retail. As Bitwise has observed, in past bear markets, investors focused on whether “crypto can survive”; now institutional investors ask “when to buy and how much to allocate.” This shift in how questions are framed is itself reshaping the slope of market declines.

ETF fund flows vs. the expectations gap in market sentiment

Spot Bitcoin ETFs are another key to understanding why the drawdown in this bear market has narrowed.

Bernstein reported that, in 2026, the combined net inflow of corporate-held assets and spot Bitcoin ETFs was about $10 billion, sharply lower than $60 billion in 2025. Spot Bitcoin ETFs saw net outflows of about $5.5 billion this year overall, with total assets under management of $74 billion.

On the surface, ETF outflows look bearish. But Bernstein’s analysis offers a different perspective: with a $74 billion stock base, outflows of $5.5 billion account for less than 7.5%. Combined with the fact that the price is close to halfway down, market pessimism has been amplified significantly. Chhugani’s team noted that while ETF fund flows may fluctuate, there has been no forced, large-scale withdrawal—an “capitulation-style” exit—by institutional allocators. Major exchanges’ open interest also moved lower, but it did not trigger a chain-reaction liquidation on the same scale as in 2022. This suggests the market is undergoing deleveraging rather than fleeing the asset class.

How corporate holdings become the market’s “stability anchor”

Against the backdrop of ETF outflows, corporate Bitcoin holders—represented by Strategy (the former MicroStrategy)—have become one of the few sources of positive net inflows in the market.

Citing company disclosure data, Bernstein said Strategy has accumulated roughly 175,000 additional Bitcoins in 2026, deploying about $14 billion, bringing its total holdings to 847,363 Bitcoins. The research note further broke down Strategy’s financial structure: the company’s total debt is only about 13% of the value of its Bitcoin collateral. The next repayment—about $1 billion in principal—is due no later than Q3 2028. The $15 billion preferred stock principal belongs to perpetual long-term capital, with no maturity or redemption pressure. Based on this constraint mechanism, the probability that Strategy would passively sell Bitcoin on a large scale is extremely low.

This corporate holdings strategy of “only buy, never sell” provides sustained buy-side support when the market is moving downward, objectively reducing the room for prices to fall further.

Hashrate migration: U.S. miners exit as global hashrate is reorganized

Another supply-side change worth attention comes from structural adjustments in the Bitcoin mining industry.

Bernstein’s research note said that major U.S. publicly listed mining companies are accelerating the shift of their business focus toward AI data centers and may even exit the Bitcoin mining track entirely. The hashrate share released by these firms is expected to be taken over by overseas miners in Southeast Asia, Central Asia, and Latin America.

The data-level changes are even more direct: since the beginning of this year, the average hashrate across the entire Bitcoin network has cumulatively fallen by about 11%. Over the past two quarters, the U.S. miners’ share of network hashrate has declined by more than 0.4 percentage points, while emerging-market miners’ hashrate share has increased by about 1 percentage point.

The geographic migration of hashrate does not directly determine price, but it reflects that the Bitcoin network is undergoing a structural reorganization on the supply side. The exit of U.S. miners reduces sell pressure from this group—previously, the market worried that miners might be forced to sell large amounts of Bitcoin due to worsening profitability. Meanwhile, the entry of miners from emerging markets maintains the network’s security and decentralization with a lower-cost structure.

Exiting the downcycle still requires clearing multiple hurdles

A narrowing drawdown doesn’t mean the cycle has already reversed. While Bernstein maintains optimistic target prices, it also provides clear warnings.

From a time perspective, the downtrend that began from the cycle high has lasted three quarters so far. Historically, Bitcoin bear-market adjustment cycles typically last 12 to 15 months, and the current duration still hasn’t reached the historical average. Bitwise also noted that past bear markets usually last 12 to 13 months, while this adjustment is currently about 8 months—meaning it cannot be ruled out that volatility may continue or that prices may test lower levels.

On signals confirming the bottom, there is still disagreement in the market. Galaxy Research’s baseline expectation is that before Q4 2026, the cycle low will be in the $40,000 to $46,000 range, noting that among 13 historical bottom indicators, only 4 have been triggered. Citibank, on July 1, lowered its 12-month target from $112,000 to $82,000, and cut its assumption for net inflows of spot Bitcoin ETFs over the next year from $10 billion to zero.

The macro environment is also a variable that cannot be ignored. Global liquidity is flowing heavily into the AI sector, diverting capital away from risk assets such as Bitcoin. Regulatory progress, the interest-rate path, and institutional capital flows will remain key variables in determining whether the market can get out of the downcycle.

Summary

The gap between 54% and 90% is not a simple numerical coincidence, but a structural mapping of the Bitcoin market’s transition from a retail speculation era to an institutional allocation era. The combination of ETFs’ long-term holdings, the continued buying by corporate treasuries, and the reorganization of miner supply on the supply side together forms the underlying support for the deceleration of declines in this bear market.

But “mild” does not mean “over.” The adjustment duration has not yet met historical benchmarks, bottom indicators have not been fully triggered, and macro liquidity still carries uncertainty—these factors suggest the market may still need to go through a period of base-building. Bernstein characterizes the current move as a “mid-cycle adjustment pattern” rather than a “cycle endpoint,” and this judgment itself also implies that confirming an exit from the downcycle requires more multi-layer, data-based validation—not just the single signal of drawdown narrowing.

Frequently Asked Questions (FAQ)

Q: What is the biggest drawdown of Bitcoin in this bear market?

A: According to Bernstein’s research note, Bitcoin fell from the cycle peak of nearly $125,000 reached in October 2025, with a maximum drawdown of about 54%. As of July 10, 2026, according to Gate market data, Bitcoin was trading at $64,034.

Q: What is the average drawdown of historical Bitcoin bear markets?

A: Historical data shows that Bitcoin’s maximum drawdowns in bear-market rounds are typically between 75% and 90%. The 2018 bear market was about 84%, the 2022 bear market was about 78%, and bear-market drawdowns from 2014 to 2015 and from 2018 to 2019 were between 76.7% and 83.6%.

Q: What are the main reasons the drawdown has narrowed in this bear market?

A: The main reasons include the increased degree of institutionalization, long-term holdings brought by spot Bitcoin ETFs, continued buying by corporate Bitcoin holders (such as Strategy), and the shift in market participation from retail-led to institution-led allocation. Together, these factors reduce sell pressure and dampen the magnitude of volatility.

Q: Has Bitcoin already exited the downcycle?

A: The market is currently divided on this. Bernstein maintains a target price of $150,000 by the end of 2026, believing the 54% retracement is a mid-cycle adjustment. But some institutions, such as Galaxy Research, believe the bottom could still be in the $40,000 to $46,000 range. The adjustment duration has not yet reached the historical average, and bottom signals have not been fully confirmed.

Q: Does ETF outflow mean institutions are withdrawing?

A: Not necessarily. In 2026, spot Bitcoin ETFs saw net outflows of about $5.5 billion, but in the $74 billion management scale, that’s less than 7.5%. Bernstein said ETF outflows did not trigger a large-scale “capitulation-style” retreat by institutional allocators; the market is experiencing deleveraging more than fleeing the asset class.