Compass Investments

-Bitcoin value declines: Is 2026 expected to see a repeat of the 2022 BTC-like decline?

Is the market approaching a repeat of the 2022-inspired decline?

Based on past trends, such a scenario cannot be ruled out. Moreover, one of the key factors weakened even more after the 2022 cycle, which reinforces CryptoQuant’s view that the scenario could repeat.

According to AMBCrypto, the current 2024 post-halving cycle is the weakest so far. In comparison, in the first year after halving, bitcoin [BTC] rose 1300% in 2017 and 60% in 2021, followed by declines in 2018 and 2022.

Consider the most recent post-halving period: the return on BTC by the end of 2025 was -6.3% , demonstrating how modest the gains were compared to previous cycles. Naturally, the question arises: What has changed?

The launch of ETFs dampened the effect of supply-side growth. Weekly withdrawals from ETFs are in the billions amid a redistribution of market risk. Simply put, institutional injections are holding back the upswing that had previously fueled large gains.

The result? An increasing loss of confidence. Unlike the downturn markets of 2018 and 2022, which followed powerful upswings, bitcoin’s 20 percent drop in 2026 is driven by loss-taking, not a pure correction after the hype.

Of course, this begs the question: Is bitcoin facing a weaker cycle than 2022?

Bitcoin is showing signs of tension very similar to May 2022.

According to CryptoQuant, the percentage of bitcoin UTXOs in drawdown (% ) has once again fallen into the 27-30% range, meaning that the majority of market participants have moved from profit to unrealized loss.

At the same time, Glassnode reports that the 3-day moving average of net realized gains/losses is -$317 million per day – a level last seen in December 2022. Taken together, these data suggest that loss-taking is picking up steam.

otably, this supports AMBCrypto’s argument.

The difference between the 2022 downturn and the current 20 percent bitcoin correction is significant. While past phases of the downturn were caused by large rises, the current downturn is mostly due to participants recognizing their losses.

In this context, it makes sense that analysts are calling the BTC cycle “softer” than 2022. With ETF inflows limiting growth and metrics signaling stress, 2026 could be the least pronounced bear market since the halving.

Unlike previous cycles, bitcoin’s 20 percent decline in 2026 is due to participants realizing losses rather than taking profits after the upswing.