Bitcoin’s decline over the last three months has revived familiar commentary about an impending crypto winter. The price has fallen approximately 18% during this time, and some analysts point to weakness in crypto stocks as a sign that the broader market is faltering.
A significant drop was seen from American Bitcoin Corp., which fell around 40% on Tuesday due to unusually high trading volume. This decline briefly affected Hut 8, which possesses a majority stake in the company. Other digital assets linked to Trump have also plummeted sharply, reinforcing the narrative that the sector is entering another extended downturn.
However, market structure data does not back this view.
A new report from Glassnode and Fasanara Digital highlights that Bitcoin has attracted over $732 billion in net new capital since the cycle low in 2022.
The report indicates that this single cycle garnered more inflows than all previous Bitcoin cycles combined and lifted the realized market cap to about $1.1 trillion while the spot price surged from $16,000 to around $126,000 at its peak. The realized cap, a gauge of genuine invested capital, typically contracts first during real winters, but that is not occurring.
Volatility presents a similar narrative.
The report indicates that BTC’s one-year realized volatility has decreased from 84% to roughly 43%, a drop associated with deeper liquidity, increased ETF participation, and more cash-margined derivatives.
Winters generally start when volatility rises and liquidity diminishes—not when volatility is nearly cut in half. Historically, this cycle is characterized by the growing popularity of call overwriting strategies in BTC and IBIT options, which have reduced volatility during this cycle, challenging previous relationships between spot and volatility.
The report argues that ETF activity contradicts the notion of a cycle peak. It notes that spot ETFs now hold about 1.36 million BTC, approximately 6.9% of the circulating supply, and have contributed roughly 5.2% of net inflows since their launch. ETF flows typically turn negative and remain so during actual winters, particularly when long-term holders reduce their exposure simultaneously. Neither of these conditions exists today.
The performance across the sector for miners also deviates from winter trends. The CoinShares Bitcoin Mining ETF (WGMI) has risen over 35% in the same three-month period during which BTC has fallen. In previous winters, miners were usually among the first to falter as hash price declined. The current divergence suggests that miner weaknesses are not widespread and that specific issues, like the American Bitcoin selloff, do not represent the entire sector.
The current drawdown aligns more with historical mid-cycle behavior than a complete reversal, according to Glassnode.
Bitcoin has experienced similar downturns in 2017, 2020, and 2023 during phases of leverage reduction or macro tightening before continuing higher. The October 2025 deleveraging event mentioned in the Glassnode and Fasanara report corresponds with this trend. Open interest plummeted sharply within hours, while spot liquidity absorbed billions in forced sales. Such events tend to reset positioning rather than signal the end of cycles.
Bitcoin remains far closer to its yearly high near $124,000 than its yearly low of around $76,000. In past winters, the market gravitated toward the bottom of the range and stayed there as realized losses accumulated and long-term holders changed their behavior. The current situation does not resemble that environment.
Short-term volatility in individual stocks can generate sensational headlines, but the structural indicators defining market cycles tell a different tale.
Glassnode emphasizes that record realized cap, diminishing volatility, and sustained ETF demand indicate consolidation following an extraordinary inflow cycle.
In conclusion, the current market dynamics do not reflect the onset of a crypto winter.
