Wintermute Flags Historic Shift: Bitcoin Bottoms Are Getting Less Brutal

Bitcoin is spending less time near extreme capitulation levels, suggesting the market may be maturing compared with earlier cycles.

Bitcoin’s latest downturn looks less severe than previous bear markets, with Wintermute noting that BTC is now about 50% below its peak 340 days after the top, compared with losses above 75% at the same stage in 2018 and 2022.

The trading firm argues that Bitcoin’s cycles are bottoming at progressively smaller drawdowns, although it stops short of confirming that June was the final low.

Bitcoin’s Drawdown is Getting Smaller

In its most recent market update, Wintermute pointed to a clear change in Bitcoin’s cycle structure: previous bottoms came after declines of 83% and 77%, while the current drawdown is around 50%.

“Each cycle has bottomed shallower: 83%, then 77%, then 50%,” Wintermute wrote.

The difference is also visible in the time needed to recover. Bitcoin was still down more than 75% from its peak 340 days into the 2018 and 2022 bear markets. Those cycles then needed more than 500 days to return to levels seen around the current point.

Wintermute linked the smaller drawdown to earlier participation from exchange-traded funds and institutional investors. It also said that improving market breadth, with profits from one group of investors moving into another, resembles the early stages of a new cycle.