Bitcoin is down 32% a year after setting a record high above $126,000 on Oct. 6, 2025, with the price now at $85,453. In most traditional markets that would still count as a severe drop. For bitcoin, it is much less dramatic than what previous post-peak years looked like.
CoinDesk’s calculations show that bitcoin was down 69.7% one year after the 2013 top, 82.3% a year after the December 2017 peak, and 74.6% a year after the November 2021 high.
A shallower bear market, with the low arriving sooner
The milder move is not limited to the one-year anniversary comparison. The bear market itself has also been less severe. At its lowest point, just below $59,000 on June 30, bitcoin had fallen more than 53% from its peak. In earlier bear markets, declines from record highs typically reached 77% to 85%.
Two changes stand out in this cycle. The drawdown has been shallower, and the worst point came earlier. In prior cycles, the trough often arrived around one year after the top or later. This time, it came after about nine months, followed by a quick recovery.
“The most notable changes are the significantly shortened duration of the drawdown and the reduced time spent at the bottom,” Tim Sun, senior researcher at HashKey Group, told CoinDesk.
Who drove the market has changed
CoinDesk said earlier bear markets fell much further and lasted longer in part because the bull runs before them were powered mainly by retail traders and leverage. Those advances often ended with fund collapses and exchange failures, as seen in 2022.
The 2023-25 uptrend looked different. It was driven more by institutional inflows through regulated vehicles such as ETFs, while the downturn that followed reflected a macro-led reversal in those flows.
“While previous cycles were driven primarily by retail investors and leverage, buyers in this current cycle increasingly stem from outside the crypto market, including ETFs, asset management giants, family offices, and even corporations. This growing demand for external asset allocation is the core driving force behind these shifts,” Sun said.
He added that the recent downturn was not entirely the result of black swan events. In his view, it was driven largely by capital outflows tied to changes in the broader macro environment and the asset-allocation backdrop. “Consequently, despite undergoing significant adjustments, the market did not trigger the persistent negative feedback loops seen in the past,” he said.
Griffin Ardern, co-founder and vol desk PM at Primal Fund, made a similar point. Institutional money behaves differently from retail speculative flows, he said.
“ETF allocation money rebalances to target weights — it buys weakness by construction.”
Ardern said leverage was cleared out right near the top and never properly returned. “Hence nine months to grind out a 53% decline, rather than a few months of cascading liquidations taking it down 80%,” he said.
According to the report, most of that leverage was unwound on Oct. 10 last year, when a macro-driven sell-off triggered more than $19 billion in liquidations across crypto derivatives markets. Temporary pricing deviations on Binance in tokens including USDe, wBETH and BNSOL added to the stress. Auto-deleveraging systems at several exchanges also forced the closure of profitable positions to cover losses.
Lower volatility may mean smaller crashes and smaller peaks
Jeff Anderson, head of U.S. at market-making firm STS Digital, said bitcoin’s realized volatility should keep falling as the asset matures and more participants enter the market. In his view, that leads to shallower drawdowns and lower peaks, and likely helped explain the more muted sell-off in the latest cycle.
CoinDesk noted that bitcoin’s volatility has been trending lower since U.S. spot ETFs launched in early 2024, softening the “Wild West” image the asset once carried.
Sun pointed to one number in particular. “Bitcoin’s current annualized volatility hovers around 40%, which is noticeably lower than its long-term historical levels exceeding 80%,” he said.
Ardern said options markets show the same pattern. Bitcoin’s annualized implied volatility index, DVOL, has been holding around 35, he said.
“The shape going forward is probably a staircase — grind up, air pocket, fast repair — rather than a parabola,” Ardern said.
Sun did not rule out sharp rallies ahead. He said bitcoin’s tokenomics still leave room for strong upside moves.
With supply capped at 21 million coins and long-term holders controlling a large share, a burst of ETF inflows over a short period, a rapid improvement in macro liquidity, or concentrated short covering could still send prices higher quickly. In those situations, he said, “marginal demand can still exert a powerful upward push on prices, potentially triggering non-linear surges.”
Options traders are still not paying for upside
Ardern’s main warning is about positioning. Implied volatility is near one of its lowest percentiles on record, while one-year options skew remains neutral to bearish.
“The derivatives market has bought ‘shallow’, but nobody is willing to pay for ‘upside exposure’ yet,” he said.
Options skew reflects the pricing gap between bullish call options and bearish put options. A neutral reading suggests traders are not aggressively chasing calls or upside exposure.
Ardern also said the moment when the shallow-drawdown narrative is loudest is often the moment when downside protection is cheapest.
The next leg lower may hinge on the U.S. 30-year yield
Ardern argued that the depth of bitcoin’s next decline will be determined more by the long end of the U.S. Treasury market than by bitcoin’s own chart.
“If the 30-year [yield] defence keeps failing, this cycle may not stay shallow either,” he said. In practical terms, if the 30-year Treasury yield keeps rising, bitcoin could face another sell-off.
The 30-year yield recently reached 5.7%, its highest level since April 2002. It has risen by more than 80 basis points this year, increasing the opportunity cost of holding non-yielding assets such as bitcoin and gold.
The Treasury announced an expanded bond buyback program in August in an effort to slow the rise in yields. BTC responded by climbing from roughly $64,000 to nearly $80,000 within days. Yields, however, have continued to rise. The report said some analysts believe the move higher in yields reflects fiscal concerns rather than a growth story, a setup they see as bullish for gold and bitcoin.
Ardern also compared the current market to the Nasdaq between 1994 and 1999, when “policy slows down, the cycle stretches, every interim correction is shallow.”
He ended that comparison with a warning: “Just remember how that story ended.” The Nasdaq peaked in March 2000 and then lost nearly 78% over roughly the next two years.