Bitcoin’s decline over the past three months has reignited a familiar line of commentary about the impending crypto winter. The price is down about 18% over the period, and some commentators have pointed to the weakness in crypto stocks as evidence that the broader market is unraveling.
One of the steepest moves came from American Bitcoin Corp., which plunged around 40% on Tuesday thanks to unusually high volume. The decline briefly extended to Hut 8, which owns a majority stake in the company. Other digital assets linked to Trump have also fallen sharply, fueling a broader narrative that the sector is entering another prolonged recession.
However, data on market structure does not support that view.
According to a new report from Glassnode and Fasanara Digital, bitcoin has attracted more than $732 billion in net new capital since the 2022 cycle low.
The report notes that this single cycle attracted more inflows than all previous bitcoin cycles combined and raised the realized limit to approximately $1.1 trillion, while the spot price rose from $16,000 to approximately $126,000 at its peak. The realized limit is a measure of actual invested capital and is typically one of the first indicators to contract during actual winters. That’s not happening.
Volatility tells a similar story.
The report shows that BTC’s one-year realized volatility falls from 84% to approximately 43%, a decrease associated with greater liquidity, greater participation in ETFs, and more cash-margined derivatives.
Winters begin when volatility increases and liquidity evaporates, not when volatility drops by almost half. What is historically true is that this cycle is marked by the increasing popularity of call overwriting strategies in BTC and IBIT options. These strategies have reduced volatility in this cycle, overriding previous spot volatility relationships.
The report argues that ETF activity also contradicts the idea of a cycle cap. The report shows that spot ETFs hold around 1.36 million BTC, about 6.9% of the circulating supply, and have contributed around 5.2% of net inflows since their launch. ETF flows tend to turn negative and stay negative during actual winters, especially when long-term holders reduce exposure at the same time. Neither condition is present today.
Mining performance across the sector also differs from winter patterns. The CoinShares Bitcoin Mining ETF (WGMI) is up more than 35% during the same three-month period that BTC is down. In previous winters, miners were among the first to collapse as the hash price deteriorated. The current divergence shows that miner weakness is not widespread and that company-specific issues, such as the US Bitcoin sell-off, are not representative of the sector.
The reduction itself is in line with historical mid-cycle behavior rather than a full reversal, Glassnode writes.
Bitcoin recorded similar declines in 2017, 2020 and 2023 during periods of deleveraging or macroeconomic tightening before continuing to rise. The October 2025 deleveraging event cited in the Glassnode and Fasanara report matches this pattern. Open interest fell sharply within hours, while spot liquidity absorbed billions of dollars in forced selling. Events like this tend to reset positioning, not end cycles.
Bitcoin also remains much closer to its yearly high near $124,000 than its yearly low of around $76,000. Each past winter, the market gravitated toward the bottom of the range and stayed there as realized losses piled up and long-term holders changed their behavior. The current situation does not resemble that environment.
The short-term volatility of individual stocks can generate dramatic headlines, but the structural indicators that define market cycles tell a different story.
Glassnote notes that the record high cap, declining volatility, and persistent demand for ETFs point to consolidation after a historic cycle of capital inflows.
To conclude, the current market dynamics are not something you would see at the beginning of a crypto winter.
