‘Bad news is already priced in’: Bitwise CIO sees possible exhaustion as bitcoin logs steepest two-week drop since June 2022

Bitcoin BTC has logged its steepest two-week drawdown since June 2022, sliding more than 50% from its October high as selling pressure rippled across spot, derivatives, and exchange-traded products.

“There is never a single reason why the crypto market falls,” Bitwise Chief Investment Officer Matt Hougan wrote in a note to investors published Friday. “Markets are complex, and there are always multiple factors at work.”

Hougan said the latest downturn has been driven primarily by long-term investors selling to front-run bitcoin’s historically observed four-year cycle, alongside leverage liquidations and a broader shift toward risk-off assets. He estimated that long-term holders sold “well north of $100 billion of bitcoin” last year as concerns mounted that the cycle would repeat prior post-peak drawdowns.

Increased supply has coincided with fading speculative demand as capital rotated toward artificial intelligence-linked equities and, more recently, precious metals — diverting capital from what Hougan described as “attention investors” from crypto markets.

This time is different

Bitcoin’s decline has unfolded alongside sharp moves across other risk assets. Gold and silver have sold off aggressively, while U.S. equities have come under pressure amid uncertainty around growth, interest rates, and capital expenditure, reinforcing Hougan’s view that crypto is reacting to macro stress rather than acting as a defensive hedge.

Despite the scale of the drawdown, Hougan argued the current episode differs materially from 2022, which was marked by crypto-specific failures and systemic risk. This time, he said, there are no signs of forced selling tied to insolvency or broken market infrastructure.

“With crypto market sentiment near historic lows — and around the levels where crypto bottomed in 2018 and 2022 — it feels like much of the bad news is already priced in,” Hougan wrote.

He cautioned that bitcoin could still fall further, noting that prior downturns were deeper and longer-lasting, but added that the asset class has matured since earlier cycles, making a repeat of 2022-style collapses less likely.

“Crypto bear markets tend to end in exhaustion, not excitement,” Hougan said.

Eric Balchunas, senior ETF analyst at Bloomberg, echoed the long-term framing, arguing that sharp drawdowns have historically failed to derail bitcoin’s broader trajectory.

“Here’s the inconvenient truth for bears, haters, and alarmist headline writers re both stocks and bitcoin,” Balchunas shared on X. “Both have a 100% perfect record of coming back from beatdowns to hit new ATHs. Maybe this time is different, but for now it is an indisputable fact.”Bitcoin has suffered its largest two-week drawdown since June 2022, falling more than 50% from its October peak.

Bitcoin is up almost 4% today, as the leading cryptocurrency has so far bounced off its $60,000 low to reclaim $70,000, The Block’s price page shows. Zooming out, BTC is down roughly 35% in the last year.

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