My medium-term Bitcoin bearish theory – and why this winter is the shortest ever

Despite all the talk about how this cycle is somehow “different”, to me the structure of the Bitcoin market still looks definitely cyclical.

Each top brings the same chorus that claims the cycle model is over, and each cooling stage renews the idea that only fluidity determines the trajectory. But the evidence always points in a different direction.

The bear market may be shorter, the rhythm may be compressed, and we may continue to hit new all-time highs in each epoch, but the underlying rhythm has not disappeared.

My core theory of bear markets

My perspective on work is simple. The next true bear market bottom is still the lowest level of the cycle, and that level is likely not there yet.

The last cycle bottomed out in 2023, and the halving hit an all-time high ahead of schedule, so a compressed recession into 2026 fits both historical patterns and current dynamics.

In fact, the current reversal could easily develop into a rapid sharp decline, temporarily overshooting downwards, and exhausting sellers, setting the stage for a further rally to new highs for the next halving.

In that scenario, a panic-induced drop to the low $40,000s would be the point at which the tape finally cuts and the buyer demographic changes.

Below $50,000 is the area where sovereign balance sheets, financial institutions, and ultra-high-net-worth fund allocators who “missed” the last move are most likely to YOLO the size.

The demand is structural. It’s a set of parties that currently view Bitcoin not as a transaction, but as a strategic stock.

The real vulnerability lies elsewhere: in the security budget.

With registrations disappearing and fee income dropping to pre-hype levels, miners have had to pivot to AI and HPC hosting to maintain cash flow.

While this stabilizes the business, it also creates a new elasticity in hashrate, especially at low prices, making the network even more dependent on issuance at the very moment it ends.

The short-term result is that the market becomes more sensitive to miner actions, more exposed to fee share declines, and more prone to sharp mechanical declines when hash prices are compressed.

All this keeps the circulating lens intact. That means shorter bear markets, sharper bottoms, and whether the next true bottom is in early 2026 or just beyond the 2027 window, a path defined by miner economics, fee trends, and the point at which deep-pocketed buyers rush to secure supply.

BTC bear market scenario (base/soft landing/deep cut)

So, no matter what Copium-fueled influencers say, Bitcoin still trades in cycles, and the next downcycle will likely depend on security budget calculations, miner actions, and the elasticity of institutional flows.

Let’s take a closer look at the data.

If fees fail to rebuild a durable floor as issuance declines, and miners rely on AI and HPC hosting to stabilize cash flow, hashrate becomes price sensitive at lows.

This combination could put pressure on the hash price, stressing the marginal operator, and creating a mechanical leg to bottom near $49,000 in early 2026, followed by a gradual recovery in 2027-2028.

Structural bidding is real, but it can flash as volatility rises and macro markets tighten at the last minute.

The bottom of the deep cut is one of the strongest price points, the $36,700 liquidity level, shown by the solid green line in the chart below.

Therefore, I believe that Bitcoin cycles, ETF flows, and miner returns will determine how far they fall.

BlackRock’s IBIT, Bitcoin’s largest ETF, had a record single-day outflow of approximately $523 million on November 19, 2025, when the spot price reversed. This is a clear example of the elasticity of flows in the new regime.

The rolling sum of the entire US spot ETF set captures the same movement as a whole, with the net outflow window widening as prices fall.

In terms of miner earnings, the fee floor that appeared during registration has now faded.

Ordinal activity last year increased fee income to a point where it rivaled, and in some cases exceeded, block subsidies, but trading demand cooled and fee share retreated.

According to Bitcoin Magazine’s fee vs. reward series and miner revenue graph, fee contributions are significantly lower than the 2024 spike.

Mempool’s commission rate percentiles also show that the median commission rate is well below last year’s peak.

Due to low commission rates, security budgets continue to depend on issuance, which predictably decreases, so the burden shifts to price and hash price to maintain miner economics.

As utilities expand into AI and HPC hosting, miner behavior is also changing.

This introduces two revenue streams that stabilize the business model, but also allows for more flexibility in hashrate at a lower price.

If hosting cash flow covers fixed costs, miners can downshift their hashes without any issues as soon as BTC margins are compressed, potentially increasing network security and price sensitivity for margins during dips.

TeraWulf has signed two 10-year AI hosting deals with Google backing that could bring in billions of dollars in revenue, and other miners are working on similar pivots.

The timeline of these contracts provides useful context for discussions about the elasticity of hash supply.

Hashprice remains a simple lens for miners’ margins.

The Luxor hashrate index shows spot and forward series hovering around the lower band until late 2025, consistent with the challenging situation.

If fee shares remain suppressed and forward hash prices remain low, the likelihood of miner balance sheet stress increases and capitulation-type supply may emerge in intensive windows.

The path from there tends to be characterized by two or three fast legs below, base, and an accumulation phase that absorbs miners and leverage supply as permanent funding and basis resets.

The $49,000 base case is a cyclical call, not a macro prediction.

This timing coincides with my bike stance and my observation that bears are getting shorter.

The all-time high before the 2024 halving compressed the pace compared to 2020-21, but the cycle did not end.

The line of interest is the confluence of three series

1. Fees as a percentage of miner revenue on a 7-day basis. If you cannot sustain more than 10-15% for several weeks.
2. Hashprice prints a new cycle low and remains there long enough to put pressure on weak operators.
3. As prices fall, the 20-day cumulative ETF flows turn negative, indicating that the flow elasticity is breaking down at a breaking point.

If you have all of these things in place, you will have a higher chance of producing clear prints.

The recovery side is all about plumbing and inventory.

ETFs, custody, and OTC rails are now moving at real size with less friction than in previous cycles, which helps translate headline dip demand into fill flow.

The $49,000 buyer’s list includes ETFs that rebalance towards target weights, ultra-high-net-worth individuals mandating additional core exposure, and sovereign or sovereign-adjacent balance sheets that treat sub-$50,000 as strategic.

Price elastic reactions from these channels are the real difference between prolonged malaise and realized cap expansion and a faster recovery to a healthier range.

It is worth giving space to counterpoint.

Layer 2 payments have the potential to create a durable price floor in this era, which will raise security budgets and ease hash price stress.

If ETF flows turn positive on down days while fee shares rise above 10%, the bear market may resolve earlier and shallower than in the base case.

The AI ​​and HPC pivot can also be framed as supporting network security in the medium term, as it allows miners to remain solvent and invest in capacity and power contracts.

This must be weighed against the short-term impact of elastic hashrates at low frequencies, where sharp prints typically occur.

Power law framing gives cycle lenses an overfit-free foundation.

On a logarithmic scale, Bitcoin’s long-term trajectory behaves like a resource-constrained organic system, with energy, hashrate, issuance, and fee markets defining frictions around the trend.

Deviations above and below the band occur when the security budget variable and the flow variable go in the same direction.

The current setup looks like a typical out-of-band excursion risk if fees remain soft and flows become less elastic.

Remarkable level reversal

If these conditions hold, a $49,000 print issue in early 2026 fits with the cycle, the miner’s economic situation, and the way Pipe absorbs the current decline.

The lows could be even higher if fees are restructured and flows stabilize faster.

The transaction simultaneously monitors the fee share, hash price, and ETF flow and lets the tape choose the path.