Hunting Bitcoin's Bottom

Bitcoin broke $60k this week. We are interpreting this low from two angles: through past cycles and through who is buying and selling right now — to work out where it lands.

Bitcoin lost $60,000 this week. It now trades at around $60k, roughly 53% below the all-time high of $126,102 in October 2025.

A few months ago, in The Four-Year Cycle Isn't Dead, we argued that every time the market declares "this time is different", the 2021 Supercycle, the ETF-era permanent bull, and the four-year rhythm eventually wins. Discounting the maths, liquidity and human greed has kept the rhythm going. We stand by that.

This piece is the update, written as Bitcoin slips below $60k. The question we care about is narrow and practical: Is this the Bitcoin bottom we’ve been looking for? To answer it, we have to revisit where Bitcoin trades and look at what is currently moving the flow.

We analyse the low in two ways:

Lens 1 — the past. Where are past lows priced in previous cycles in terms of price and time?

Lens 2 — the present. Who is actually selling, who stopped buying, and what is out-bidding Bitcoin for the marginal dollar right now?

A TL;DR, before diving in:

Both lenses point to the same zone: a final low around $45k–$55k, most likely in Q3/Q4 2026 — unless ETF outflows stop fast and MSTR stabilises, in which case the low may already be priced-in.

Lens 1 — Learning from Past Cycles

The four-year cycle has always been the case for Bitcoin, but for different reasons.

Historically, full Bitcoin bear markets have taken roughly a year from peak to trough, and they have bled hard — 73% or more — before the market found the low.

The two charts frame the whole debate. On price, Bitcoin is sitting at −50%, a full 23 points above the −73% to −93% band where every prior bear cycle actually ended. As for time, it is closing in on the 12–14 month window that produced the last three lows at ~9 months .

With regards to time, the bear is nearly over. When looking at price, it has only revealed half of the correction.

A −60% drawdown from the October 2025 ATH puts BTC around $50k; −65% puts it near $44k. That is why $45k–$55k looks the most likely: painful enough to reset positioning, but still much shallower than the usual −75% to −85% crypto-native wipeouts.

If the past has anything to say, it shows there won’t be an apocalypse nor an instant moon. Instead, a final washout is being presented.

Lens 2 — What’s Driving This Cycle

If Lens 1 tells us roughly where and when, Lens 2 tells us why the bottom hasn't happened yet — and why the calendar alone can't call the low this time.

The bull market didn't have a blow-off top

This cycle is emotionally confusing because the top did not feel like a proper top. Bitcoin hit $126k in early October 2025, but there was no true retail blow-off. There wasn’t any "everyone quits their job to trade altcoins" phase or a clean $150k victory lap.

Instead, the cycle was interrupted. The 10–11 October crash liquidated more than $19bn of crypto leverage — the largest single-day liquidation in history — and sent Bitcoin to around $104,783 during the crash window. The trigger was a fresh round of US tariffs on Chinese goods, hitting a market with a record leverage.

That event killed reflexivity. Before October, the question was "how high can this go?" Afterwards, it became "who is still forced to buy?".

DoubleEdged Sword - ETF Outflows

There is a dark side of institutional adoption: ETFs brought in a huge new pool of capital, which opened up markets and made the exit door much cleaner. In previous cycles, panic came from miners, offshore venues, retail spot, crypto funds and levered perps. This time, a part of the sell button sits inside traditional portfolios — and it’s been pressed hard.

The monthly picture shows how fast it turned. A spring rebound put March and April back in the green. Then May and June erased it, with June's $4.06bn of net outflows being the worst month since the ETFs launched in January 2024, beating the prior −$3.56bn record from February 2025.

MSTR used to be the marginal buyer. Now it's playing defence.

The second problem for this cycle is MicroStrategy (MSTR). For most of the last cycle, MSTR wasn't just a Bitcoin holder — it was a machine. Trading at a premium to NAV, it could issue stock, buy more BTC, lift BTC-per-share, and convince the market the premium deserved to exist. The premium created the buying; the buying created the narrative; the narrative supported the premium. Beautiful reflexivity, but in the approaching cycle, the reflexivity inevitably works against them.

Strategy's mNAV fell to 0.99, an enterprise valued below the value of its Bitcoin, and it made its first BTC sale since 2022, with preferreds trading near record lows. It currently holds 847,363 BTC, worth roughly $50bn.

When MSTR trades above NAV, issuing equity to buy BTC makes sense. Near or below 1x, that flywheel destroys value. So Strategy is now pivoting to defence: a $2.55bn reserve, $1.25bn of board-authorised BTC monetisation capacity, and a STRC preferred dividend raised to 12%, all to fund dividends and interest whilst buying back securities when doing so beats out issuing common equity.

Bitcoin has lost one of its most reliable, price-insensitive marginal buyers — exactly when ETF holders are redeeming.

The bid can only be back under one scenario: mNAV reclaims 1 and STRC trades towards par. Until then, Strategy is neutral at best, a marginal seller into stress at worst.

Bitcoin struggles to attract marginal buyers amid the AI capex boom.

AI is eating the marginal risk dollar.

Instead of using the same capital to buy BTC, ETH, SOL, miners and crypto beta are now speculating on the AI capex — chips, memory, networking, data centres, power. And this isn't slowing down anytime soon.

The four biggest US hyperscalers (Amazon, Microsoft, Alphabet, Meta) are guiding to roughly $700bn of capex in 2026, up ~75% year on year — about 60% of Bitcoin's entire market cap, in a single year. They intend to spend at that pace, or more, for every year in this decade. Zoom out and McKinsey forecasts a $5.2tn of AI data-centre capex cumulatively by 2030 — roughly 4.5× all of Bitcoin. Semiconductor stocks that are benefiting from the AI capex have skyrocketed. It is very difficult to call it a “bubble” given they represent real revenue and profits with increasingly impressive AI capacities and revenue growth from top firms like Anthropic.

The buyer who might have stepped in at $60k is often busy speculating on AI capex instead.

Where Bitcoin Bottoms

Both historical cycles and current headwinds (ETF outflows, MSTR’s neutral stance, and capital rotation into AI) point to a final bottom in the $45k–$55k range, likely in Q3/Q4 2026.

Base Case: $45k–$55k (Painful, but shallower than previous bear markets).

Bull Case: Lows are already in, provided ETF outflows reverse and MSTR stabilises.

Bear Case: A deeper flush to $35k–$42k if AI speculation continues to heat up.

Until then, the stance isn't blind bullishness — it's patient accumulation. The market is wounded enough to care, but not healed enough to chase.

Put simply: at $60k, Bitcoin is cheap but not yet clean. The past says the low will probably be sitting lower; the present says the sellers are pushing it there. Market forces like ETF redemptions, a sidelined MSTR, and AI pulling capital away are still active. The best risk/reward is to treat $45k–$55k as the accumulation zone and scale in as the signals above start to trigger, rather than to chase the first bounce.

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