Bitcoin downturn concludes as three indicators shift, with one already showing signs of movement.

Julio Moreno, the research lead at CryptoQuant, recently stated that Bitcoin is currently in a bear market that may persist until the third quarter of 2026.

He is not the only one expressing this view. Matt Hougan from Bitwise and an increasing number of institutional voices are applying the “bear” designation more liberally than at any time since early 2023.

However, these analysts frequently qualify their statements: many institutions are maintaining or increasing their exposure even as they recognize the shift in market conditions.

This leads to a definitional dilemma. If a bear market no longer signifies capitulation and mass exit, what does it signify?

Moreover, if the well-known four-year cycle is no longer valid, as argued by VanEck, K33 Research, and 21Shares in their recent analyses, how long can a bear market last when the previous timeline is no longer relevant?

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What defines a bear market

The conventional finance definition of a bear market serves as a useful starting point.

The US Securities and Exchange Commission defines a bear market as a broad index declining by 20% or more over a minimum of two months. Bitcoin surpassed that threshold months ago.

From its early October 2025 peak above $126,000, BTC has fallen by approximately 41% to around $74,000 as of Feb. 3. By this standard, the case appears settled.

Nonetheless, Coinbase Institutional research explicitly labels the 20% threshold as “somewhat arbitrary” and less relevant to crypto, where 20% fluctuations can occur without a genuine regime change.

In practice, analysts utilize a three-part dashboard: price trend, positioning and derivatives, and demand and liquidity.

The price trend is the most apparent indicator. CryptoQuant heavily relies on the 365-day moving average as a boundary marker.

Bitcoin is currently trading below that level, which is around $101,448. CryptoQuant’s Bull Score Index, a composite measure of on-chain health, recorded a score of 20 out of 100, categorized as extreme bear territory.

Coinbase has previously employed the 200-day moving average in cycle analyses to define bear regimes, and Bitcoin remains below that threshold as well.

Positioning and derivatives provide a second signal. Glassnode’s recent Week On-Chain reports document a shift towards downside protection, a bearish skew in options markets, and conditions that heighten downside sensitivity, including dealer gamma below zero.

When traders pay premiums to hedge against further declines instead of seeking upside, the market exhibits defensive behavior.

Demand and liquidity offer the structural context. CoinShares estimates that large holders have sold around $29 billion in Bitcoin since October. Digital asset exchange-traded products have experienced approximately $440 million in outflows year-to-date.

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CryptoQuant and MarketWatch describe the current environment as characterized by weak demand coupled with diminishing stablecoin liquidity, classic elements of a bear market.

The latest Coinbase Institutional and Glassnode global investor survey, conducted from Dec. 10, 2025, to Jan. 12, 2026, found that 26% of institutions now characterize the market as being in a bear phase, an increase from just 2% in the previous survey.

However, the same survey indicated that 62% of institutions maintained or increased their net long exposure since October, and 70% consider Bitcoin to be undervalued.

This disconnect is the defining characteristic of the 2026 bear market. It is not about capitulation; it is about recognizing the regime while retaining structural exposure.

The term “bear market” is increasingly less about who is exiting and more about who continues to buy, even as sentiment remains poor.

Bitcoin fell 41% from its early October 2025 peak of approximately $126,000 to around $74,000 on Feb. 3, 2026, trading below both the 200-day and 365-day moving averages.

When does this bear market conclude?

Defining the conclusion of a bear market necessitates clarity regarding what “end” signifies.

The most rigorous approach views it as a regime shift rather than an emotional response. Analysts identify three practical triggers: trend reclamation, demand inflection, and normalization of risk appetite.

Trend reclamation occurs when Bitcoin regains and maintains levels above long-term moving averages, such as the 200-day or 365-day, for several weeks.

Demand inflection signifies a shift in exchange-traded fund and exchange-traded product flows from subdued or negative to sustained inflows, along with a slowdown in large-holder distribution.

Normalization of risk appetite indicates that options skew returns to balanced levels, with reduced demand for downside protection and sustainable leverage building.

The forward-looking scenarios cluster into three time horizons, each supported by specific analyst insights.

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The first scenario depicts a classic crypto winter extending through mid or late 2026.

Julio Moreno has identified $70,000 over three to six months and $56,000 in the latter half of 2026 as a deeper potential trajectory. This scenario assumes demand remains weak, flows continue to be negative, and Bitcoin fails repeated attempts to reclaim its moving averages. Bear-market rallies occur but do not sustain.

The second scenario envisions a shorter, shallower bear market lasting three to six months, characterized by volatile, range-bound price movements, followed by improving conditions in the latter half of 2026.

CoinShares explicitly anticipates a turbulent three-to-six-month period, with medium-term constructive conditions as whale selling diminishes by mid-2026.

In this context, the bear market is more about duration than depth: a regime where upside is limited until demand reverses, but the floor remains intact.

The third scenario considers the bear market as a liquidity-wave event rather than a calendar-based cycle.

The bear concludes when demand and liquidity re-accelerate, independent of the halving timeline. This aligns directly with CryptoQuant’s demand-led perspective and avoids determinism associated with halving. It acknowledges that the previous playbook may no longer be applicable.

Scenario	Horizon	What it looks like	Primary triggers to watch	What would invalidate it
Classic winter (Moreno path)	Mid/late 2026	Failed rallies; deeper retests	Sustained failure to reclaim 200D/365D; weak flows; persistent downside hedging	Reclaim + hold above MAs and flows flip sustainably positive
Short, shallow bear (CoinShares path)	3–6 months	Range-bound chop; capped upside	Stabilizing ETP flows; whale selling slows/exhausts	Breakdown below key support zones with rising liquidation pressure
Liquidity-wave regime (post 4-year cycle)	Variable	Ends when liquidity/demand turns, not a calendar	Global liquidity proxies, real yields, stablecoin liquidity, hedging demand	Liquidity improves but BTC still can’t reclaim long MAs (suggests structural weakness)

Is this bear market smaller than previous cycles?

The current drawdown of approximately 40% is already modest compared to the typical over 70% declines seen in past crypto winters.

However, various analysts’ downside scenarios cluster around $55,000 to $60,000, suggesting a total drawdown closer to the mid-50% range if realized.

This would still be smaller than historical extremes but significant enough to qualify as a bear market by any measure.

The market is also increasingly divided. Bitcoin maintains structural leadership, while much of the remaining crypto market performs considerably worse.

The Coinbase and Glassnode report highlights this through dominance metrics and defensive positioning behavior. The 2026 market exhibits a K-shaped pattern, and the “bear market” may impact asset classes unevenly.

The four-year cycle has ended, but what takes its place?

VanEck posited in 2025 that the four-year cycle had fractured and that the previous playbook was becoming less reliable.

K33 Research released a report titled “4-year cycle is dead, long live the king,” which outlines the reasons for the regime change.

21Shares describes the cycle as evolving, potentially extending to five years, as liquidity waves lengthen and institutional involvement deepens.

What replaces the four-year clock is a liquidity-and-flows framework. This encompasses real yields, global liquidity impulses, flows of exchange-traded funds and exchange-traded products, stablecoin liquidity, and hedging demand.

CoinShares explicitly frames Bitcoin’s recent dislocation in terms of its relationships with precious metals and macro liquidity. Coinbase and Glassnode emphasize a defensive derivatives posture as a real-time regime indicator.

The implication for the duration of bear markets is that they may become more frequent but less severe. Instead of existential winters, the market may face more regular regime drawdowns if institutional flows provide a support level.

Rallies may still fail until demand and liquidity improve, but the underlying structure could prevent the kind of multi-year capitulation that has characterized previous cycles.

This creates a paradox. The bear market may last longer in terms of calendar time but cause less damage in percentage terms. Alternatively, it may conclude sooner if demand shifts before the old cycle logic would suggest.

Regardless, the clock that governed Bitcoin for a decade is no longer in effect.

Institutional investors identifying the market as being in a “bear phase” rose from 2% to 26% in recent surveys, yet 62% maintained or increased their positions and 70% view Bitcoin as undervalued.

The checklist is more significant than the calendar

In 2026, labeling a bear market is not determined by a single metric, but rather a checklist.

Trend breaks, hedging demand, and a demand-liquidity rollover all indicate the same direction. Bitcoin is in a bear regime according to most relevant frameworks.

The timing of its conclusion depends less on the halving calendar and more on the demand cycle’s timing. CoinShares anticipates three to six months of volatility. CryptoQuant foresees the possibility of deeper lows in the latter half of the year.

Both perspectives could be valid at different times if the regime oscillates rather than resolves clearly.

The four-year cycle has ended, but the question of when this bear market concludes is not unanswerable. It will end when Bitcoin reclaims its long-term moving averages, when institutional flows turn positive, and when options markets cease pricing for protection.

Until that point, the market remains in a regime where upside is limited, and patience is essential. Even as institutions continue to buy while labeling it a bear.

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