Canary Capital said Bitcoin’s latest slump is testing long-held assumptions but does not mark the end of the four-year cycle.
The asset manager said the current downturn arrived earlier than expected due to structural pressures in the mining sector.
Rising electricity costs, partly driven by expanding AI data centres, disproportionately impacted small and mid-sized miners.
Miner stress forced earlier liquidation of Bitcoin reserves than seen in previous cycles.
“This resulted in widespread miner capitulation earlier in the cycle than historical norms,”
Canary Capital said.
The launch of spot Bitcoin ETFs also contributed to pressure by collapsing the basis trade and compressing futures premiums.
Canary Capital rejected claims that institutional products have neutralised miner influence on price action.
“The four-year cycle remains intact. Bitcoin peaked in October at approximately $126,000, consistent with prior cycle timing,”
Canary Capital said.
The firm said ETFs and broader access have not yet removed miners as a structurally influential force.
Macroeconomic factors, including diverging central bank policies and weak consumer spending, were cited as ongoing headwinds.
Canary Capital said volatility has continued to moderate with each halving cycle.
“Each halving cycle delivers diminishing marginal impact, but forced sellers, particularly miners, remain structurally influential,”
The report said.
Founder and chief investment officer Steven McClurg projected a 50% to 55% peak-to-trough decline for the current bear phase.
“With BTC already down roughly 30%, a gradual decline over the next six to nine months is reasonable,”
Steven McClurg said.
The report said a cyclical trough could form by mid-to-late summer before recovery begins.
Canary Capital added that 2026 is likely to focus on adoption, profitability and fundamentals across the crypto sector.
At the time of reporting, Bitcoin price was $92,520.52.