My medium term Bitcoin bear thesis – and why this winter could be the shortest yet

For all the talk that this cycle is somehow “different,” the structure of Bitcoin’s market still looks unmistakably cyclical to me.

Each top brings the same chorus claiming the cycle model is dead, and each cooling phase renews the idea that liquidity alone now sets the trajectory. But the evidence keeps pointing the other way.

Bears may be getting shorter, cadence may be compressing, and new all-time highs may keep creeping earlier in each epoch, yet the underlying rhythm hasn’t disappeared.

My core bear market thesis

My working view is simple: the next true bear-market bottom will still be the lowest print of the cycle, and that print likely isn’t in yet.

As the last cycle bottomed in 2023 and the halving delivered an all-time high ahead of schedule, a compressed downturn into 2026 fits both historical patterns and present dynamics.

In fact, the current rollover could easily evolve into a fast, sharp decline that briefly overshoots to the downside, exhausts sellers, and sets the stage for another climb toward a new high ahead of the following halving.

In that scenario, a panic-driven slide toward the high-$40,000s becomes the point where the tape finally breaks, and where the buyer base changes character.

Sub-$50k is where sovereign balance sheets, institutions, and ultra-high-net-worth allocators who “missed” the last move are most likely to YOLO in size.

That demand is structural. It’s the set of actors who now view Bitcoin not as a trade, but as strategic inventory.

The real fragility lies elsewhere: in the security budget.

With inscriptions fading and fee revenue collapsing back toward pre-hype levels, miners have had to pivot into AI and HPC hosting just to maintain cash flow.

That stabilizes their businesses but creates new elasticity in hashrate, especially at price lows, and leaves the network leaning more heavily on issuance at the exact moment issuance is stepping down.

The short-term result is a market more sensitive to miner behavior, more exposed to dips in fee share, and more prone to sharp mechanical selloffs when hashprice compresses.

All of this keeps the cyclical lens intact: shorter bears, sharper floors, and a path where the next true bottom, whether early 2026 or just ahead of the 2027 window, is defined by miner economics, fee trends, and the point at which deep-pocketed buyers rush to secure supply.

BTC Bear-Market Scenarios (Base/Soft-Landing/Deep Cut)

So, regardless of what copium-fueled influencers say, Bitcoin still trades in cycles, and the next downcycle is likely to hinge on security-budget math, miner behavior, and institutional flow elasticity.

Let’s dig deeper into the data.

If fees do not rebuild a durable floor as issuance steps down, and if miners lean on AI and HPC hosting to stabilize cash flow, hashrate becomes more price sensitive at the lows.

That mix can pressure hashprice, stress marginal operators, and produce mechanically driven legs that print a floor near $49,000 in early 2026, then hand off to a slower recovery into 2027 and 2028.

The structural bid is real, but it can blink when volatility rises, and macro tightens at the margin.

The deep cut bottoms at one of the strongest price points and liquidity levels at $36,700, denoted by the green solid line on the chart below.

So, while I believe in the Bitcoin cycle, ETF flows, and miner revenue will determine how low we go.

Bitcoin’s largest ETF, BlackRock’s IBIT, posted a record one-day outflow of about $523 million on Nov. 19, 2025, as the spot price rolled over. That is a clean example of flow elasticity in the new regime.

Rolling sums across the U.S. spot ETF set capture the same behavior in aggregate, with windows of net outflows building as prices grind lower.

For miner revenue, the fee floor that emerged during inscriptions has now faded.

Last year’s ordinals activity drove fee revenue to periods where it rivaled the block subsidy, occasionally surpassing it, but transaction demand cooled, and fee share retreated.

According to Bitcoin Magazine’s fee versus rewards series and miner revenue charts, fee contributions have been materially lower than the 2024 spikes.

Mempool fee rate percentiles also show median fee rates well below last year’s peaks.

A weak fee share keeps the security budget leaning on issuance, which falls predictably, so the burden shifts to price and hashprice to keep miner economics intact.

Miner behavior is also changing as public operators expand into AI and HPC hosting.

This introduces dual revenue streams that stabilize business models, yet it can also make hashrate more elastic at price lows.

If hosting cash flow covers fixed costs, miners can downshift hash when BTC margins compress without immediate distress, which tightens network security at the margin during dips and can deepen price sensitivity.

TeraWulf signed two 10-year AI hosting agreements backed by Google with multibillion-dollar revenue potential, and other miners are actioning similar pivots.

The timeline of these contracts is useful context for the hash supply elasticity argument.

Hashprice remains the simple lens for miner margins.

Luxor’s Hashrate Index shows spot and forward series that have hovered near the lower band into late 2025, consistent with tighter conditions.

If forward hashprice holds at depressed levels while fee share stays subdued, the probability of miner balance sheet stress rises, and capitulation-style supply can appear in concentrated windows.

The path from there tends to feature two or three fast legs lower, a base, then an accumulation phase that absorbs miner and leveraged supply as perpetual funding and basis reset.

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

The timing aligns with my cycle stance and the observation that bears have been getting shorter.

The 2024 pre-halving all-time high compressed the cadence versus 2020–21, but it did not end cycles.

The line to watch is the confluence of three series

1. Fee share of miner revenue on a 7-day basis that fails to sustain above 10–15% for weeks.
2. Hashprice printing new cycle lows and holding there long enough to pressure weaker operators.
3. 20-day cumulative ETF flows turning negative as price declines, which demonstrates flow elasticity breaking down at the margin.

When these align, the probability of a sharp print rises.

The recovery side of the call rests on plumbing and on inventory.

ETFs, custody, and OTC rails now move real size with fewer frictions than in prior cycles, and that helps convert headline dip demand into executed flow.

The buyer list at $49,000 includes ETFs rebalancing toward target weights, UHNW mandates adding core exposure, and sovereign or sovereign-adjacent balance sheets that treat sub-$50,000 as strategic.

A price-elastic response from these channels is the practical difference between a drawn-out malaise and a faster climb back to realized cap expansion and healthier breadth.

Counterpoints deserve space.

Layer 2 settlement could build a durable fee floor in this epoch, which would lift the security budget and moderate hashprice stress.

If fee share rises and holds above the teens while ETF flows flip positive on down days, the bear could resolve earlier and shallower than the base case.

The AI and HPC pivot can also be framed as supportive of network security in the medium term, since it keeps miners solvent and able to invest in capacity and power contracts.

That case should be weighed against the near-term effect of elastic hashrate at the lows, which is where sharp prints typically occur.

The Power-law framing also gives the cycle lens a foundation without overfitting.

On log scale, Bitcoin’s long-run trajectory behaves like an organic system with resource constraints, where energy, hashrate, issuance, and a fee market define the friction around trend.

Deviations above and below that band occur when security-budget variables and flow variables pull in the same direction.

The present setup looks like a classic below-band excursion risk if fees remain soft and flow elasticity weakens.

Flip-Levels To Watch

If these conditions hold, a $49,000 print in early 2026 fits the cycle, the miner economics, and the way pipes now absorb dips.

If fees rebuild and flows stabilize sooner, the low can set higher.

The trade is watching fee share, hashprice, and ETF flows at the same time, then letting the tape pick the path.