Stop clinging to outdated methods; the current Bitcoin market is not a repeat of the 2022 bear market.

Author: Garrett

Compiled by: Yuliya, PANews

Recently, some analysts have begun comparing Bitcoin's current price movement to that of 2022. While short-term price patterns may appear somewhat similar, such a comparison is utterly absurd in the long run. Whether considering long-term price patterns, the macroeconomic context, or the composition and holdings of investors, the underlying logic has fundamentally changed.

One of the biggest mistakes in analyzing and trading financial markets is focusing solely on short-term, superficial statistical similarities while ignoring long-term, macroeconomic, and fundamental drivers.

Completely opposite macro background

In March 2022, the United States was in a clear cycle of high inflation and interest rate hikes, primarily driven by the following factors:

• Excess liquidity released during the COVID-19 pandemic.

• The outbreak of the war in Ukraine further fueled inflation.

In that environment, risk-free interest rates were rising, liquidity was being systematically withdrawn, and financial conditions were tightening. Therefore, the primary objective of capital was risk aversion. What we saw in the Bitcoin market was a typical high-level distribution structure within a tightening cycle.

The current macroeconomic environment is exactly the opposite:

• The conflict in Ukraine is easing (partly due to U.S. efforts to reduce inflation and interest rates).

• The Consumer Price Index (CPI) and the risk-free interest rate in the United States are declining.

• More importantly, the artificial intelligence (AI) technological revolution has greatly increased the likelihood of the economy entering a long-term downward inflation cycle. Therefore, in a larger cycle, interest rates have already entered a phase of rate cuts.

• The central bank's liquidity is being reinjected into the financial system.

All of this defines the behavior of capital as "risk preference".

The chart analysis shows a clear negative correlation between Bitcoin prices and year-on-year CPI changes since 2020—Bitcoin tends to fall during periods of rising inflation and rise during periods of falling inflation. With the AI-driven technological revolution, a long-term decline in inflation is highly probable, a view echoed by Elon Musk, thus reinforcing this argument.

Furthermore, since 2020, Bitcoin has shown a strong correlation with the US Liquidity Index (except for a short-term distortion in 2024 caused by ETF inflows). Currently, the US Liquidity Index has broken through its short-term (white line) and long-term (red line) downtrend lines, indicating a new uptrend is on the horizon.

Different technical structures

• 2021-2022: The market at that time showed a weekly M-top structure, which is usually associated with the top of a long-term market and will suppress prices for a considerable period of time.

• 2025: The current market performance shows a break below an upward channel on the weekly chart. From a probability perspective, this is more likely a "bear trap," and the price will subsequently rebound back into the channel.

Of course, the possibility of the market evolving into a sustained bear market like that of 2022 cannot be completely ruled out. However, the key point is that the $80,850 to $62,000 range has undergone extensive consolidation and turnover. The previous substantial accumulation process offers a far superior risk-reward ratio for establishing bullish positions: the upside potential significantly outweighs the downside risk.

What conditions are needed to recreate a bear market like the one in 2022?

For a bear market of the magnitude of 2022 to recur, the following indispensable conditions must be met:

• A new round of inflationary shocks may emerge, or a major geopolitical crisis of similar scale to that of 2022 may erupt.

• Central banks around the world are restarting interest rate hikes or quantitative tightening (QT).

• Prices decisively and persistently fell below $80,850.

Before these conditions are met, any claim that a structural bear market has arrived is premature and constitutes subjective speculation rather than objective analysis.

Different investor structures

• 2020–2022: This was a market dominated by retail investors with limited institutional participation, especially a lack of long-term allocation institutions.

• 2023 to present: The launch of Bitcoin spot ETFs has introduced structured long-term holders. These institutions have effectively locked up the supply, drastically reduced the speed of token trading, and significantly reduced market volatility.

From both a macroeconomic and quantitative perspective, 2023 marked a structural inflection point for Bitcoin as an asset. Bitcoin's volatility pattern has shifted from the historical 80%–150% to 30%–60%, reflecting a fundamental change in its asset behavior.

Core structural differences (current vs. 2022)

The biggest difference in the structure of Bitcoin investors now (early 2026) compared to 2022 is that the market has shifted from being "retail-dominated and highly leveraged for speculation" to being "institution-dominated and structurally long-term holding".

In 2022, Bitcoin experienced a classic "crypto-native bear market," driven by panic selling by retail investors and a chain reaction of liquidations of leveraged positions. Today, however, Bitcoin's operating environment has entered a more mature institutional era, characterized by:

• Stable underlying needs.

• Locked-in supply.

• Institutional-level volatility.

The following is a core comparison based on on-chain data (such as Glassnode, Chainalysis) and institutional reports (such as Grayscale, Bitwise, State Street) up to mid-January 2026 (when Bitcoin was priced between $90k and $95k).

Dimension	2022 (Bottom of the bear market, approximately $16k-$20k)	Early 2026 (currently, approximately $90k-$95k)	The biggest changes and impacts
Dominant Investor Type	Retail investors + crypto natives (retail investors, leveraged traders)	Institutional + Corporate + Macro Funds (ETFs, Corporate Treasury Funds, Sovereign/Pension Funds)	The market has shifted from being driven by retail investor sentiment to being driven by institutional allocation. Institutional holdings currently account for approximately 24% (compared to less than 5% in 2022). Retail investors were net sellers.
Institutional/ETF Shares	Very low (no spot ETFs, limited institutional exposure)	The combined assets under management (AUM) of a Bitcoin spot ETF and ETP are > $100-$130 billion, holding approximately 1.3-1.5 million Bitcoins (representing ~6-7% of the circulating supply).	The approval of ETFs in 2024 was a turning point. Net inflows are projected to exceed $25 billion in 2025. Even during the downturn, institutions provided structural support.
Corporate vault holdings	Very few (early stages of MicroStrategy)	The listed company holds more than 1.3 million Bitcoins (~6-7% of the supply); MicroStrategy holds over 650,000 Bitcoins, followed closely by Japanese companies such as Metaplanet.	The "MicroStrategy model" is going global. Businesses are shifting from speculation to strategic reserves. In 2025, he added more than 200,000 Bitcoins to his portfolio.
Retail investor behavior	Panic selling led to a sharp drop in the number of active addresses and a plunge in small transaction volumes.	Retail investors were net sellers (for example, an estimated 247,000 bitcoins were sold in 2025); Small-scale transactions dropped sharply, but some small investors (less than 1 Bitcoin) accumulated shares at the low point.	Retail investors have either "surrendered" or turned to indirect investment through ETFs. Google Trends activity is low, and small-scale on-chain activity is decreasing.
Long-term holder (LTH) behavior	Large-scale forced/panic distribution led to a sharp drop in LTH supply.	LTH is still being distributed (peaking in late 2025, now slowing down); Tokens are flowing to institutions/enterprises	2022 was a year of "desperate distribution"; It's now time for "orderly profit-taking by institutions." LTH's weekly realized profits have fallen from a peak of over 100,000 bitcoins to lower levels.
Whales/Large-sized investors	Whales also panic-sold or were liquidated.	"Fish to Shark" (holding 10-1,000 Bitcoins) + whales (>1,000 Bitcoins) are aggressively accumulating (e.g., the heaviest monthly buy since the FTX crash).	Large and medium-sized investors (high-net-worth individuals, trading desks, and institutions) are currently the main buyers; Glassnode's accumulated score is close to its maximum value.
Exchange reserves and liquidity	High reserves (>3 million Bitcoins) can easily trigger a chain reaction of liquidations.	Reserves have fallen to approximately 2.76 million bitcoins; Net outflow; more funds are locked in ETFs/corporates	Reduced "hot money" in exchanges → lower risk of leveraged liquidation. Volatility decreases (e.g., from 84% to ~43%).
Overall market stability	High leverage + retail investors → extreme volatility, with drawdowns exceeding -70% multiple times.	Institutional backing + corporate lock-up → Even a -44% drawdown (from the 2025 peak) did not trigger a chain reaction.	2025 will see negative returns, but the structure is resilient. Unlike the "total collapse" of 2022, there is now solid institutional buying support.