Bitcoin has started the new year with renewed momentum, gaining nearly 2% over the past 24 hours as traders returned after the holiday period and risk appetite stabilized across markets. The broader crypto market also moved higher, with total market capitalization rising to approximately $3.01 trillion.

BTC is currently trading near the $89,000–$89,600 zone and could attempt a retest of $90,000 if short-term momentum continues. However, beneath the surface, Bitcoin is navigating a historically unusual phase that raises important questions about the traditional four-year cycle.

A Break From the Four-Year Cycle

Bitcoin closed 2025 with an annual decline of roughly 6%, marking the first red year following a halving event. This breaks the long-observed four-year cycle pattern that previously defined bull market peaks in 2013, 2017, and 2021.

From its October peak, BTC is down nearly 30%. Rather than following a purely retail-driven speculative cycle, current price behavior appears increasingly influenced by macro liquidity conditions, institutional capital flows, and ETF-related demand. This shift suggests Bitcoin may be transitioning from a reflexive boom-bust cycle into a more structurally driven market.

On-Chain Signals and Bear Market Debate

According to CryptoQuant’s Head of Research Julio Moreno, Bitcoin may have entered a bear market as early as November. Several indicators within the Bull Score Index — including investor profitability, network activity, demand, and liquidity — turned bearish and have yet to recover.

A key technical confirmation cited is Bitcoin trading below its one-year moving average. Historically, this has aligned with broader market downtrends.

Moreno suggests a potential bottom could form between $56,000 and $60,000, aligning with Bitcoin’s realized price — the average price at which current holders acquired their BTC. In previous cycles, realized price often acted as a base during extended bear markets.

Importantly, even a move to $56,000 would represent a drawdown of roughly 55% from all-time highs, notably smaller than the 70–80% declines seen in prior bear cycles.

Why This Cycle Looks Different

Despite the bearish metrics, this market has remained structurally stable compared to past downturns. Previous bear markets were defined by major systemic failures, such as the collapse of Terra, Celsius, and FTX in 2022.

In contrast, the current cycle has seen:

Continued institutional participation

ETF-related accumulation that is less sensitive to short-term volatility

More regulated and resilient infrastructure

These factors may help dampen extreme downside moves, even during prolonged consolidation phases.

Institutional Accumulation Continues

Adding to the long-term support narrative, Tether disclosed the purchase of 8,888 BTC on New Year’s Eve, bringing its total Bitcoin holdings above 96,000 BTC. The acquisition, valued at approximately $780 million, is part of Tether’s strategy to allocate 15% of its quarterly profits to Bitcoin.

Tether has also diversified into hard assets, increasing its gold reserves to 116 tons, signaling a broader treasury strategy focused on scarce, non-sovereign assets.

Short-Term Market Structure and Options Risk

Spot volumes and market activity have recovered after a sharp holiday-related decline. However, sentiment remains cautious as Bitcoin options with a notional value of $1.5 billion are set to expire. The put-to-call ratio stands at 0.48, with a maximum pain level near $88,000 — a zone that may act as a short-term magnet for price action.

Recent price behavior shows BTC repeatedly testing the $90,000 region but failing to sustain acceptance above it, while buyers continue to defend the mid-$87,000 to $88,000 range.

Key Takeaway

Bitcoin’s first post-halving red year does not necessarily signal structural weakness, but rather a transition. The asset is increasingly shaped by institutional flows, macro conditions, and longer-term capital rather than purely speculative cycles.

Understanding this shift is critical. Bitcoin may no longer move in the explosive, retail-driven patterns of the past — but it may also be entering a phase of deeper liquidity, reduced systemic risk, and more measured drawdowns.

For traders and investors, adapting to this evolving market structure is becoming just as important as predicting direction.

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