Bitcoin dropped 50% from its October 2025 all-time high of $126,080, marking the shallowest bear market in its history. The decline comes as capital exits ETFs amid geopolitical and macroeconomic tensions. Historical cycles show steeper drawdowns: 2012 exceeded 90%, while subsequent cycles saw 82% and 74% corrections in 2022, according to CryptoQuant data. Analysts attribute the compressed drawdown to Bitcoin's institutionalization through ETFs, deeper liquidity, and corporate adoption, though they warn the bear market may continue.
Bitcoin Drawdown Compresses Across Historical Cycles
Bitcoin's current 50% decline from $126,080 represents the shallowest bear market drawdown in the asset's history, according to CoinGecko data. In 2012, the bear market drawdown exceeded 90%, according to CryptoQuant data. Subsequent cycles saw this number decline to 82% for the next two cycles and 74% in the 2022 cycle.
"Bitcoin is now a more institutionalized macro asset, supported by ETFs, deeper liquidity, and a larger base of long-term allocators," Jeff Ko, chief analyst at crypto exchange CoinEx, told Decrypt. "That is why drawdowns have been compressing across cycles, and I do not expect another 80% drawdown in the current cycle."
Martin Lee, content & market insights lead at DWF Labs, told Decrypt: "The holder composition of Bitcoin this cycle is very different from what we've seen in previous cycles. We have the presence of institutions and corporations putting Bitcoin on their balance sheet. We do expect drawdowns to be more shallow and general volatility to be more muted as we've seen over the last 2 years."
Analysts Cite ETF Outflows and Macro Tightening as Ongoing Risks
Despite the 50% drawdown representing a "meaningful reset," Ko does not believe the bear market is over. The CoinEx analyst said investors should pay attention to "ETF outflows, macro tightening, and liquidity rotation" to determine how prolonged a bear market can be.
Alex Tsepaev, Chief Strategy Officer of B2PRIME Group, told Decrypt the "current picture is bearish due to the combination of a chain of ETF outflows, macro pressure, and on-chain stress caused by both." Tsepaev highlighted: "Since May 18, there has been only one day of inflows, on June 4, which shows how weak the passive bid has become."
Key Support Levels Identified at $60,000 and Below
Both Ko and Tsepaev collectively highlighted $60,000 as the first key psychological level, with a bearish scenario involving a retest of the $55,000 and $45,000 levels.
Wintermute suggested in a Tuesday note that the $62,000 support has come undone after Bitcoin's recent drop. "Bitcoin never spent meaningful time in the $50,000 to $59,000 range on the way up in 2024, so there are no real technical levels here. That leaves flow as the thing setting direction," the market-making firm said.
Users on prediction market Myriad, owned by Decrypt's parent company Dastan, have assigned a 72% chance that Bitcoin's next move could push it down to $55,000. That number has increased from 39% on June 1.
Potential Catalysts for Market Bottom Formation
Ko highlighted a potential de-escalation of the geopolitical outlook as a critical catalyst that could help form a bottom for Bitcoin. A de-escalation on this front, Ko said, could lift the energy and risk-off overhang, opening the door to a dovish Fed turn, or at least a signal that further hikes are off the table.
Increasing ETF demand is the second catalyst highlighted by Ko.
On the altcoin front, Lee noted how Hyperliquid's HYPE has diverged from the broader market trend, describing it as a "potential sign" of protocols being valued individually based on their own merits instead of being at the mercy of Bitcoin's performance. "Not every token will recover, and that's simply a function of how markers are, assets get priced according to their merits over time—the same thing happens in equities," Lee said.
FAQ
What is Bitcoin's current drawdown from its all-time high?
Bitcoin is down 50% from its October 2025 all-time high of $126,080, according to CoinGecko data. This represents the shallowest bear market drawdown in Bitcoin's history compared to previous cycles where drawdowns exceeded 90% in 2012, 82% in subsequent cycles, and 74% in 2022.
Why do analysts believe Bitcoin's bear market is not over?
Analysts cite ongoing ETF outflows, macro tightening, and liquidity rotation as indicators the bear market continues. Alex Tsepaev of B2PRIME Group noted that since May 18, there has been only one day of ETF inflows on June 4, demonstrating weak passive demand. Jeff Ko of CoinEx emphasized investors should monitor these factors to assess the bear market's duration.
What are the key support levels analysts are watching for Bitcoin?
Analysts collectively identified $60,000 as the first key psychological level, with bearish scenarios involving retests of $55,000 and $45,000. Wintermute noted in a Tuesday report that the $62,000 support level has broken, and users on prediction market Myriad assigned a 72% probability Bitcoin could drop to $55,000, up from 39% on June 1.
