With $732B in Inflows, Bitcoin Shows Resilience, Say Analysts, Debunking ‘Crypto Winter’ Fears

Bitcoin Pullback Reflects Mid-Cycle Reset, Not ‘Crypto Winter,’ Say Glassnode and Fasanara

Recent declines in Bitcoin are part of a routine mid-cycle correction rather than the start of a prolonged crypto downturn, according to a year-end report from Glassnode and Fasanara Digital. Record inflows, rising realized capitalization, and falling volatility all suggest market consolidation rather than a “crypto winter.”

Bitcoin has fallen roughly 18% over the past three months, sparking renewed speculation about an impending downturn. Some crypto equities have been hit hard—most notably American Bitcoin Corp., which dropped about 40% on Tuesday amid unusually heavy trading volume. This decline briefly affected Hut 8, the majority owner, while other Trump-linked digital assets also fell sharply, feeding narratives of broader sector weakness.

However, market structure tells a different story. Glassnode and Fasanara report that Bitcoin has attracted over $732 billion in net new capital since the 2022 cycle low—more than all previous cycles combined. Realized capitalization has risen to around $1.1 trillion, while the spot price climbed from $16,000 to roughly $126,000 at its peak. Realized cap, which measures actual invested capital, usually contracts sharply during true market winters—but that is not happening.

Volatility trends reinforce the bullish case. BTC’s one-year realized volatility has dropped from 84% to about 43%, reflecting deeper liquidity, growing ETF participation, and increasing use of cash-margined derivatives. Historically, winters begin with rising volatility and evaporating liquidity—the opposite of current conditions. Innovations like call overwriting strategies in BTC and IBIT options have further dampened volatility, breaking traditional spot-volatility patterns.

ETF flows also support resilience. Spot ETFs now hold approximately 1.36 million BTC, about 6.9% of circulating supply, contributing roughly 5.2% of net inflows since launch. In real winters, ETF flows turn sharply negative as long-term holders exit, a trend not seen today.

Miner performance diverges from typical winter patterns as well. The CoinShares Bitcoin Mining ETF (WGMI) has gained more than 35% over the same three-month period that saw BTC decline. In past downturns, miners were among the first to collapse; the current strength suggests that recent company-specific selloffs, such as American Bitcoin’s, are not representative of the sector.

Historical trends also support the mid-cycle reset view. Similar pullbacks occurred in 2017, 2020, and 2023 during periods of leverage reduction or macro tightening, before Bitcoin resumed its upward trajectory. The October 2025 deleveraging event cited in the report fits this pattern, with open interest falling sharply while spot liquidity absorbed billions in forced selling—a typical market reset rather than a cycle-ending collapse.

Bitcoin remains closer to its yearly high near $124,000 than its yearly low around $76,000. In past winters, prices gravitated toward the bottom of the range while realized losses accumulated and long-term holders adjusted behavior—conditions not present today.

While short-term equity volatility can dominate headlines, structural indicators tell a different story. Glassnode highlights record realized cap, declining volatility, and steady ETF demand as evidence of consolidation after historic inflows.

In conclusion, current market dynamics align with a mid-cycle correction rather than the start of a “crypto winter.”

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