MarketsBitcoinBlockchain
|4 min ReadBitcoin’s Drawdown Is An Mid-Cycle Reset, Not A Winter
Jax Morales
Senior Analyst
Published
Jan 16, 2026
Alpha Briefing: Bitcoin is down about 18% over the last three months, but on-chain data from Glassnode and Fasanara shows roughly $732 billion in net new capital, a realized cap near $1.1 trillion, and halved realized volatility. Spot ETFs now hold 1.36 million BTC and miners are outperforming, all pointing to a mid-cycle reset in an institutionally anchored market rather than the start of a new crypto winter.
“Crypto winter” headlines are back. Bitcoin has slipped roughly 18% over the past three months, and politically charged names like American Bitcoin Corp have posted brutal single-day drops that dragged parts of the mining sector lower. On the surface it feels like the early scenes of a new bear market.
The market structure says otherwise. A new year-end report from Glassnode and Fasanara Digital argues this is a Bitcoin-led, institutionally anchored cycle where capital, volatility, and ETF flows all line up with a mid-cycle shakeout, not a long freeze.
Record Capital In, Realized Cap Still Rising
Since the 2022 cycle low, Bitcoin has absorbed more than $732 billion in net new capital, according to the report. That is more inflow in a single cycle than all prior Bitcoin cycles combined.
Realized cap, which values each coin at its last on-chain move and tracks true invested capital, has climbed to roughly $1.1 trillion as spot price moved from around $16,000 to roughly $126,000 at the peak. In past winters, realized cap was one of the first metrics to roll over as capital quietly exited and holders realized losses. Today it is still pressing higher.
That tells you this drawdown is happening with a thick layer of committed capital under the market. Price can fall further, but the structure does not resemble a mass escape from Bitcoin. It looks like a stress test of positioning inside a still-crowded long.
Volatility Is Getting Managed, Not Exploding
The volatility profile also breaks with classic winter behavior. Glassnode and Fasanara show Bitcoin’s one-year realized volatility falling from about 84% to roughly 43%. Historically, winters began when volatility spiked and liquidity disappeared, not when volatility was cut almost in half.
This time, lower realized swings are tied to structurally different players. Call overwriting and covered-call strategies on BTC and IBIT options are selling upside volatility for yield and mechanically damping the tape. More cash-margined derivatives and deeper ETF-linked liquidity are absorbing shocks that used to trigger cascading liquidations.
The October 2025 deleveraging event fits that pattern. Futures open interest fell sharply in hours as positions were forced out, yet spot markets absorbed billions in selling and moved on. That is how mid-cycle clean-ups look. They flush leverage and reset funding without breaking the underlying bid.
ETFs And Miners Don’t Look Like A Top
If this were the start of a real winter, ETFs would be bleeding and miners would be cracking first. The data shows the opposite.
The report says spot Bitcoin ETFs now hold about 1.36 million BTC, roughly 6.9% of circulating supply, and have contributed around 5.2% of net inflows since launch. In previous winters, ETF flows flipped negative and stayed there while long-term holders also trimmed exposure. Today, neither condition is present. Demand from that channel is still positive.
Miners are also diverging from winter playbooks. The CoinShares Bitcoin Mining ETF (WGMI) is up more than 35% over the same three-month period in which BTC is down. In earlier winters, miners were the first casualties as hashprice collapsed and weak operators failed. Today, the 40% plunge in American Bitcoin Corp looks like a company-specific or Trump-linked story, not a sector-wide signal.
Layer on price context and the picture is clear. Bitcoin trades much closer to its yearly high near $124,000 than its yearly low around $76,000. In every prior winter, the market gravitated toward the bottom of the range and sat there while realized losses and capitulation built up. That is not what we are seeing now.
From a BitNews Editor view, this is not the end of the cycle. It is a reset in an institutionally anchored market after a historic inflow wave. For traders, that means respecting the drawdown while recognizing that the core drivers of a real winter, so far, are simply not in place.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.