Bitcoin has just logged its sharpest drawdown of the current cycle, prompting renewed debate about whether the market remains in a standard correction or is signaling a deeper structural shift.
Analyst DaanCrypto says the coming months will be pivotal, as the familiar four-year cycle appears intact in timing but questionable in price behavior.
Largest Drawdown of the Cycle Raises Questions
According to Daan, Bitcoin’s recent drop represents the steepest decline seen in this cycle. While the overall market structure still fits the traditional four-year rhythm from a timing perspective, price performance is no longer aligned with expectations.
The final year of the four-year cycle is historically strong, yet 2025’s performance has been negative. That deviation has sparked discussion over whether the cycle may already be broken, or whether the market is undergoing a prolonged mid-cycle correction.
2026 Could Bring More Rotations, Not a Smooth Trend
Daan cautions that 2026 is unlikely to deliver a straightforward uptrend. Instead, he expects the market to continue producing the shorter “few-month rotations” that have defined Bitcoin’s behavior over the last 18 months.
These rotations, characterized by alternating surges and sharp resets, have repeatedly appeared after major catalysts:
- •Post-ETF sell-offs and mania phases
- •Middle Eastern geopolitical tensions
- •Post-inauguration tariff volatility
- •Mt. Gox distribution waves
- •Yen carry trade blow-ups
- •Whale-driven liquidation events
The chart highlights each of these events with corresponding drawdown periods, showing how frequently Bitcoin has shifted direction throughout 2024 and 2025. The most recent downswing, tied to whale selling and liquidation pressure, marks the largest red zone of the cycle.
Cycle Timing Holds, Price Trend Does Not
Despite the turbulence, Daan still sees the timing of the cycle as “pretty accurate.” However, he notes that the price deviation—down when it should be printing strong gains—raises valid questions about whether the four-year structure is weakening.
If the cycle has indeed broken, 2026 may continue the pattern of rotational volatility rather than the explosive final-year rally the market typically expects.
For now, Bitcoin’s next major move will hinge on whether this latest drawdown becomes a base for recovery, or the start of a broader divergence from historical cycle behavior.