Bitcoin's Shallowest Bear Yet: Maxis Say It's Just a Liquidity Glow-Up 💅

Bitcoin is down roughly 50% from its Oct. 6, 2025 all-time high of $126,080, marking the shallowest bear market drawdown in the asset's history, according to CoinGecko data. The leading cryptocurrency has shed about 27% so far in 2026, trading below $60,000 after a losing June and a weekly decline of nearly 17% that erased approximately $200 billion in market capitalization — its worst weekly performance since July 2024, per CoinDesk. Year-over-year, the Nasdaq has gained 34% and the S&P 500 nearly 24%, even after the recent pullback, as capital has rotated into AI-related equities.

The shift has coincided with sustained U.S. spot bitcoin ETF outflows. According to CoinDesk, the funds have logged $3.45 billion in outflows across 11 consecutive sessions, while Strategy (MSTR) Chairman Michael Saylor said on X that bitcoin ETFs have seen "~$4B of outflows since May 14." Since May 18, there has been only one day of net inflows, recorded on June 4, according to Alex Tsepaev, Chief Strategy Officer of B2PRIME Group. Wintermute said in a Tuesday note that the $62,000 support level has given way after Bitcoin's recent drop.

Despite the losses, long-time bitcoin advocates, or "maxis," argue the decline reflects capital rotation rather than a structural issue with $BTC. "Bitcoin is not facing a bitcoin problem. It's facing a liquidity problem," Mati Greenspan, founder of Quantum Economics, told CoinDesk. "AI has become the market's new obsession, but obsessions fade." Saylor echoed that view, writing: "Capital markets are funding the AI buildout at historic scale: ~$400B over six months. Bitcoin ETFs have seen ~$4B of outflows since May 14, pressuring $BTC. This is a capital rotation, not a bitcoin impairment. Volatility creates opportunity." Greenspan cited the anticipated Anthropic IPO, targeting a roughly $1 trillion valuation, along with potential listings from OpenAI and SpaceX that together could raise more than $200 billion, as evidence of where liquidity is migrating.

On the bear market context, CryptoQuant data cited by Decrypt shows prior cycle drawdowns exceeded 90% in 2012, 82% across the following two cycles, and 74% in 2022 — all deeper than the current 50% retracement. "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, added: "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."

Still, not all analysts read the resilience as a sign that the bottom is in. Ko told Decrypt he does not believe the bear market is over, pointing to "ETF outflows, macro tightening, and liquidity rotation" as factors to watch. Tsepaev agreed, citing "a chain of ETF outflows, macro pressure, and on-chain stress." Both Ko and Tsepaev identified $60,000 as the first key psychological level, with a bearish scenario involving retests of $55,000 and $45,000. Analysts at Bernstein, however, argued in a Monday research note that the quieter tape reflects growing institutional stability rather than structural decline, pointing to the stark drop in net bitcoin inflows this year.