Carving a boat to find a sword: Is it about Bitcoin? The market logic has completely reversed by 2026.

Recently, many analysts have been doing one thing—using the “script” of the 2022 bear market to predict the current Bitcoin trend. This analogy sounds reasonable, but if you really believe that, you’re essentially “carving a boat to seek a sword.” The underlying logic of the market has undergone a revolutionary change. Viewing the new era with old perspectives will inevitably lead to misjudging the direction.

Why is this benchmarking approach untenable? Because none of the conditions that drove the 2022 bear market are met now. From macro environment to investor composition, from technical patterns to supply-side structure, everything is telling a different story.

Macro Environment Has Turned 180 Degrees

Back in 2022, what was the market facing? High inflation, persistent rate hikes, liquidity tightening, and capital risk aversion. The Federal Reserve, in combating the liquidity glut left over from the pandemic and energy prices driven up by the Ukraine war, gradually tightened financial conditions. Bitcoin naturally became a “discarded child” among risk assets.

And now? It’s completely the opposite.

The Consumer Price Index (CPI) is falling, the Fed has entered a rate-cutting cycle, and liquidity is being re-injected into the financial system. The Ukraine conflict is easing, and geopolitical risks are temporarily alleviated. More importantly, the AI technological revolution is changing economic expectations—such technological progress usually exerts long-term downward pressure on inflation, further solidifying the outlook for rate cuts.

Data shows that since 2020, Bitcoin’s price change relative to CPI has exhibited a clear negative correlation—when inflation rises, BTC falls; when inflation recedes, BTC rises. Currently, inflation is in a declining phase, which is favorable for Bitcoin. The US liquidity index has broken through its short-term and long-term downtrend lines, and a new upward trend is forming.

It’s like the same river—2022’s water flows downward, but the water in 2026 is rising. Using the same method to predict the outcome is obviously illogical.

Institutional Era Has Arrived, Retail Investors Have Surrendered

The deepest difference lies in the change in investor structure.

From 2020 to 2022, the Bitcoin market was still dominated by retail investors. Many leveraged traders speculated in it, and when the market turned, these retail investors became “chives,” triggering chain liquidations and panic selling. It was a classic “retail panic.”

Now, it’s different. After the approval of spot BTC ETFs in 2024, the situation has changed dramatically. The Bitcoin holdings of these ETFs have already exceeded 1.3-1.5 million coins, accounting for about 6-7% of circulating supply. In just 2025 alone, ETFs saw net inflows of over $25 billion. These institutions are not here for short-term speculation; they represent long-term allocation needs.

More interestingly, more and more listed companies are treating Bitcoin as a strategic reserve. Led by MicroStrategy, which holds over 650,000 coins, followed by Japan’s Metaplanet, which increased holdings by over 200,000 coins in 2025. These companies won’t panic-sell due to price fluctuations; their participation directly locks in a large supply.

Data shows that current institutional and corporate holdings account for about 24% of the total, much higher than the less than 5% in 2022. As for retail investors? They have “surrendered”—either selling to cut losses or investing indirectly through ETFs. On-chain data indicates that small retail trading activity has significantly declined. Apart from a few “shrimp” level investors bottom-fishing, most retail investors have exited direct participation.

What does this mean? It means the risk of panic selling has greatly diminished. The chain reaction of domino-like liquidations seen in 2022 is unlikely to recur with institutional backing today.

Supply Side Has Been Locked by Institutions

Bitcoin’s liquidity structure has also undergone a fundamental change.

Previously, exchange reserves exceeded 3 million coins, a number large enough to trigger chain liquidations. Now? Reserves have fallen to about 2.76 million coins and continue to decline. Why? Because more and more Bitcoin are being locked in ETFs, corporate treasuries, and cold wallets—these are “dead water” that are not easily flowing into the trading market.

When supply is locked, the market’s pricing power is in the hands of those who truly want to hold, rather than those forced to sell in panic. According to Glassnode data, the current “accumulation score” (an indicator measuring the strength of large players’ accumulation) is near historical highs, indicating that whales and institutions are actively accumulating on a historic scale.

In 2022, long-term holders (LTH) were despairingly dispersing their holdings, releasing大量比特币压低价格。Now, while LTHs are also distributing, the difference is that these coins are flowing in an orderly manner into institutions and corporate hands, not flooding the market. This is “profit-taking” rather than “panic selling”—a completely different nature.

Technical Patterns Tell a Different Story

From a technical perspective, what did the 2021-2022 highs look like? A weekly M-top pattern, which typically indicates a long-term bear market. At that time, there was ample reason to believe it would take years for the market to bottom out.

But the situation from 2025 to now is different. Bitcoin is showing a weekly pattern of breaking below the ascending channel, which from a probability standpoint, looks more like a “bear trap”—likely just the last dip before a rebound.

Of course, completely ruling out the possibility of a sustained downtrend like 2022 is naive. But the key point is: the range from $80,850 to $62,000 has experienced extensive consolidation and reaccumulation, with institutions and big players actively building positions. This means the risk-reward ratio has improved—limited downside and significant upside potential.

Recreating the 2022 Bear Market Requires Passing Through Three Gates

How difficult is it for the current market to evolve into a 2022-level bear market? It requires meeting three indispensable conditions:

First, a new wave of inflation shocks must occur, or a geopolitical crisis of comparable scale to the Ukraine war must erupt. Short-term volatility alone is not enough.

Second, global central banks must restart rate hikes or quantitative tightening (QT), meaning a reversal of the current rate-cutting cycle. Given the AI-driven reduction in long-term inflation expectations, the probability of this is low.

Third, and most directly, Bitcoin’s price must decisively and persistently break below the $80,850 key support level and continue to decline.

None of these three conditions are met yet. Until all three gates are opened, it’s premature to say that a structural bear market has arrived.

Declining Volatility Is a Sign of the Institutional Era

Another detail that illustrates the point—volatility.

Around 2022, Bitcoin’s annual volatility was as high as 80%-150%, a typical feature of a retail-led, highly leveraged speculative market. Now? It has fallen to the 30%-60% range. This is not just a numerical change but a sign that the market is shifting from a “casino” to an “asset.”

Institutions dislike extreme volatility; they need stability and predictability. As more institutions enter, market volatility will inevitably subside. This change, though seemingly ordinary, actually reflects a deep upgrade of the entire market ecosystem.

Stop Carving a Boat to Seek a Sword

In summary: trying to understand the 2026 Bitcoin market through the 2022 framework is like trying to find a new boat by carving marks on an old one—no matter how hard you try, you won’t find it. The macro background has reversed, investor structure has changed, supply is locked, and technical patterns tell a different story.

Recreating the 2022 bear market requires economic conditions, central bank policies, and geopolitical risks to all turn around—probabilities so low that it’s not worth betting on. Instead of chasing an impossible historical replay, it’s better to recognize what the market is actually doing now.

Although short-term volatility may still exist, the market has already entered a new era in its structure. Analysts clinging to the old “carving a boat” mentality will only be proven wrong by the market.