The Bitcoin bear market in 2026 has different characteristics from the major corrections recorded in previous cycles. In Bitwise's assessment, the main reason is the growing presence of institutional investors, who have come to see declines as opportunities to accumulate positions rather than abandon the market.
This behavioral shift indicates, according to the company, that Bitcoin's fundamentals continue to evolve even during a period of pressured prices. At the same time, factors such as high inflation, expectations of higher interest rates, geopolitical uncertainties, and the strong flow of capital into artificial intelligence companies continue to limit a faster recovery.
Juan Leon, Bitwise's senior investment strategist, says the asset manager's institutional clients are currently divided into two profiles. The first consists of investors who already have exposure to Bitcoin and use corrections to increase their positions through the dollar-cost averaging strategy.
The second group includes large funds and managers that are still waiting for greater regulatory certainty before expanding their investments in cryptocurrencies.
According to Leon, this shift becomes evident when comparing the profile of current conversations with those of a few years ago.
"In 2022, clients were asking whether cryptocurrencies would survive," Leon said. "In 2026, they are asking about entry points and position sizing. This is a completely different conversation."
Bitcoin bear market shows greater resilience
For Bitwise, the current downturn cycle is structurally more solid than previous ones.
While Bitcoin has accumulated a decline close to 50%, the correction recorded in 2022 reached about 78%. During the 2018 bear market, the asset lost approximately 84% of its value.
In the asset manager's view, this behavior shows that the market has matured and has a base of investors better prepared for periods of volatility.
Leon believes this movement explains why Bitcoin's so-called "floor" continues to rise with each cycle.
"The minimum price is rising with each cycle, and that is no accident," Leon said. "It's what happens when an asset wins and the marginal investor shifts from a retail speculator to a professional allocator."
Despite the positive assessment, the strategist emphasizes that new declines may still occur. Previous cycles remained in a downtrend for approximately 12 to 13 months, while the current one is completing about eight months.
Indicators point to a possible bottom formation
Even without ruling out new fluctuations, Leon says that several signs traditionally associated with the end of a bear market are beginning to appear.
Among them are technical oversold indicators, approximately half of Bitcoin investors operating at a loss, a resumption of accumulation by long-term holders, and strong outflows from spot Bitcoin ETFs recorded in June.
In Bitwise's assessment, these movements usually indicate a capitulation process, a stage that historically precedes a price recovery.
AI diverted billions from the cryptocurrency market
For Leon, the biggest challenges currently faced by Bitcoin are not related to its fundamentals, but to the macroeconomic environment.
Persistent inflation continues to raise expectations for interest rates, while geopolitical tensions increase investor caution.
At the same time, enthusiasm around artificial intelligence has directed billions of dollars to companies linked to the technology sector, temporarily reducing the flow of capital allocated to cryptocurrencies.
"I’m not going to call AI a bubble," said Leon.
According to him, the strong demand for computing infrastructure is legitimate and can be observed in the expansion of Bitcoin miners into artificial intelligence and high-performance computing operations.
Even so, the strategist believes that this relationship tends to change in the coming months.
"The cyclical path is as follows: AI investment expectations are absorbed, relative valuations compress, and allocators seek assets that are 50% below their peak, but with improving fundamentals," he said.
Regulation could accelerate the inflow of institutional capital
Leon also states that artificial intelligence and cryptocurrencies should act in an increasingly complementary way.
According to him, applications based on AI agents will require programmable money infrastructure, machine-to-machine payments, and stablecoin networks, creating new opportunities for the sector.
In addition to the technological environment, the asset manager is closely monitoring the progress of cryptocurrency legislation in the United States.
In Leon’s assessment, the eventual approval of the Clarity Act could pave the way for the entry of trillions of dollars in institutional capital into the market.
"What the Clarity Act changes is the permission structure for trillions of dollars in new institutional capital," said Leon.
This view also appears in Bitwise’s most recent quarterly report. Even after one of the weakest periods for cryptocurrency prices in recent years, the asset manager highlights that institutional infrastructure continues to expand, the tokenization of real-world assets is advancing, and traditional financial firms are increasing their presence in the sector.
For Bitwise, these factors indicate that, despite the price correction, Bitcoin’s fundamentals remain stronger than in previous cycles.