Bitcoin has declined from a record high of approximately $126,080 in October to trade recently in the low-$60,000 range — a drop of nearly 50% that has shaken market sentiment. However, according to analyses from asset manager VanEck and blockchain analytics firm CryptoQuant, this downturn may align with patterns seen in previous market cycles.

In a Thursday report, VanEck noted that Bitcoin's current slump tracks the asset's historical four-year halving cycle. Under this mechanism, which is built into Bitcoin's protocol, the mining reward is cut in half roughly every four years, tightening the rate of new supply entering the market. The most recent halving occurred in April 2024. VanEck framed the current decline as a recurring feature of Bitcoin's market structure rather than a departure from it.

VanEck's GEO framework — which monitors Global Liquidity, Ecosystem Leverage, and On-Chain Activity — currently shows two of its three signals in neutral territory, while the ecosystem leverage signal is described as constructive. The firm stated that this combination points to early signs of a bottom forming and suggested that it may be time to begin scaling into positions.

Separate research from CryptoQuant points in a similar direction. The firm's analysts highlighted on-chain data indicating that long-term Bitcoin holders — generally considered the market's most stable and loss-tolerant cohort — are now carrying deeper unrealized losses than the broader market, based on adjusted Net Unrealized Profit/Loss (NUPL) data. NUPL is a widely used on-chain metric that measures the aggregate unrealized profit or loss of all coins relative to their last-move price, providing insight into overall market sentiment and holder behavior.

CryptoQuant analyst MorenoDV noted this week that this specific dynamic — long-term holders experiencing greater losses than the market average — has appeared at every prior major cycle bottom.

CryptoQuant, however, cautioned against prematurely declaring a bottom. In past cycles, the same long-term-holder metric fell to much deeper negative extremes before a true low was reached, and prior bear markets saw Bitcoin draw down on the order of 70 to 80 percent from peak to trough. Current readings have not yet reached those levels, suggesting that Bitcoin could still face another sharp capitulation event — unless stronger institutional demand and a more resilient holder base allow the current cycle to bottom with less damage than previous ones. The launch of U.S. spot Bitcoin exchange-traded funds in early 2024 has broadened institutional access to the asset, a structural difference from prior cycles that some market participants argue could alter the trajectory of drawdowns and recoveries.

Taken together, the two reports describe a market that appears stressed by historical standards but has not yet reached the extremes that have characterized past cycle floors.

This post first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.