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NYDIG revisits in a research report and analysis its “Bitcoin Cycles Narratives Framework,” introduced in November 2025. Seven months later, amid a roughly 53% price decline from its October 2025 peak, the model continues to provide a lens for understanding the digital asset’s position in its cyclical pattern.
NYDIG says the framework describes a repeatable sequence: a foundational narrative around structural demand sparks expansion; reflexive loops of participation and leverage amplify the move; external shocks challenge the narrative’s durability; and the cycle eventually contracts before survivors rebuild around fresh foundations.
According to NYDIG, Bitcoin has followed this sequence as anticipated. The firm says the asset remains firmly in the contraction phase, with the anticipated transition to reconstruction and reframing yet to materialize.
NYDIG’s analysis suggests the current downturn is incomplete and that additional downside pressure remains possible until clear capitulation signals emerge.
The firm points to several markers of contraction, including:
NYDIG also notes that historical cycles have seen deeper troughs of 75% to 85%. It says that absent long-term holder capitulation, widespread insolvencies, or a full market reset, the framework indicates the bottom may not yet be in.
A central theme in the update is the fading momentum from two major demand drivers that fueled 2025’s rally: spot Bitcoin ETF inflows and corporate treasury accumulation.
NYDIG says these sources absorbed substantial supply—often exceeding 10,000 BTC weekly and peaking near 48,000—helping push prices above $126,000. In 2026, however, both have weakened considerably.
The report describes ETF flows as turning volatile, with frequent and sizable redemptions. It also says corporate buying has narrowed, concentrating heavily around a few dominant players such as Strategy, while new entrants have slowed and some entities, including miners, have become net sellers.
NYDIG argues that the shift from broad, accelerating demand to more inconsistent and tactical flows has removed a key support pillar. It adds that without renewed expansion in either channel, Bitcoin lacks the mechanical buying pressure that defined much of the prior year.
The firm links this to price behavior, saying the strongest gains coincided with peak combined inflows, while the move down toward the $60,000 area tracked deterioration in net flows.
NYDIG also highlights seasonality. It says historical data shows Bitcoin’s performance tends to soften from May through September, with August and September posting the weakest average and median returns due to lower liquidity and fewer catalysts.
For a market already in contraction, NYDIG says this “cruel summer” dynamic heightens near-term downside risks, even though conditions often improve heading into the fourth quarter.
Recent market action, NYDIG says, reflects tactical oversold conditions, with Bitcoin rebounding from a cycle low near $59,000.
However, the firm points to underlying fundamentals that it says remain pressured, including persistent ETF outflows and declining stablecoin balances. In NYDIG’s view, any recovery could prove short-lived without renewed inflows or stabilization.
NYDIG’s assessment is measured: the cycle narrative remains intact, but the path forward depends on completing the contraction phase and the emergence of potential new demand catalysts.
Coinbase has launched a High Yield USDC vault within its in-app DeFi lending offering, adding a second lending option that provides exposure to a wider range of collateral assets. The product is powered by Morpho infrastructure and uses vault allocations curated by Steakhouse Financial.
