When will the deep correction end?

As cryptocurrencies have experienced consecutive months of deep corrections, market opinions are beginning to diverge. Some believe that cryptocurrencies are facing a "crisis of confidence." Pimco's Managing Director Pramol Dawan stated that the narrative of Bitcoin as "digital gold" has weakened, and its price decline indicates that cryptocurrencies are "not a monetary revolution."
CryptoQuant trader and analyst Carmelo Alemán expressed a more pessimistic view, stating that a series of breaches of key support levels have reinforced the view of a market shift, indicating that Bitcoin has entered a bear market. He warned that both spot and futures trading patterns for Bitcoin are now clearly "bearish," and the market is in a "surrender" phase, with most participants likely to suffer losses. Many in the crypto community are tempering their expectations for 2026. Market maker Wincent's director Paul Howard admitted that he does not expect Bitcoin to hit new all-time highs in 2026. Even more, Ferro BTC Volatility Fund founder Richard Hodges said he has warned large Bitcoin holders to remain patient, as they will not see Bitcoin reach new highs in the next 1,000 days.
To identify when the Bitcoin market might show signs of recovery, focus on key turning points and events across three core dimensions.
First, the internal factor: regulatory implementation. Pay close attention to the Senate's progress and final approval of the CLARITY Act. A clear regulatory framework will directly eliminate industry compliance uncertainties and lay the foundation for capital inflows;
Second, the external factor: policy guidance. Keep an eye on Wosh’s governing tendencies and the Federal Reserve’s upcoming monetary policy pace. Their policy orientation will directly influence overall market liquidity and the valuation of risk assets;
Third, demand: long-term capital inflows. The key indicator is the compliance deployment of U.S. pension funds into BTC. The entry of trillion-dollar long-term funds will be a crucial driver for market revival.
Additionally, indicators such as whether weekly net inflows into Bitcoin spot ETFs continue to turn positive, whether the mNAV indicator of leading DAT companies can return to the critical threshold of 1, the range changes in the market sentiment index reflecting panic and greed, and fluctuations in derivatives positions indicating trading activity, are all straightforward data points.
The new Federal Reserve Chair Wosh’s stance on whether to adopt a hawkish tone again and his policy position on cryptocurrencies are also worth ongoing attention. After all, Wosh highly praised cryptocurrencies in a 2021 interview, calling them the "new gold" for people under 40. His view on Bitcoin in 2025 remains unchanged; he said Bitcoin does not make him nervous, and in July, he stated, "Over time, Bitcoin will be reborn as an alternative currency."
Wosh previously gave a relatively positive evaluation of Bitcoin’s asset attributes, revealing in interviews that he views Bitcoin as an important asset that can help policymakers discern right from wrong, believing Bitcoin can serve as an excellent watchdog for policy decisions. His past hawkish stance may amplify selling pressure emotionally, but it is unlikely to single-handedly determine a prolonged bear market for Bitcoin.
"This year, Bitcoin may enter a phase of tighter macro constraints and higher volatility, with its trend depending on which of the two main factors prevails. If U.S. economic and inflation data support sustained higher interest rates, combined with a strengthening dollar and shrinking risk budgets, Bitcoin is likely to experience repeated dips followed by oscillations, with sharp drops and rebounds along the way. Conversely, if the market gradually confirms easing measures after mid-year, trading funds will shift back to net inflows, and Bitcoin’s recovery potential will significantly increase."
However, from a long-term perspective, the value of cryptocurrencies has always been questioned. Wang Yingbo, a digital economy scholar at Shanghai Academy of Social Sciences, told 21st Century Business Herald that Bitcoin faces a logical deadlock: its high price relies on strong speculative expectations that it will be widely adopted in the future, but for it to be widely adopted as a medium of exchange, its value must be relatively stable like fiat currency.
These two are fundamentally mutually exclusive. Once Bitcoin’s price stabilizes, its main appeal to speculative capital—the potential for rapid appreciation—will disappear, and the speculative basis supporting its current overvaluation will collapse. In Wang Yingbo’s view, whether it’s gold or Bitcoin aiming to become "digital gold," both will ultimately become marginalized. In the agricultural era, the monetary standard was represented by physical assets like gold; in the industrial era, it was energy sources like oil; in the digital economy era, it is information processing power represented by computing power. Since moving away from the gold standard, gold has lost its "monarchical" status as money. Although it still fluctuates due to habitual thinking, its importance continues to decline, which is an undeniable fact.
Recent surges in gold prices are due to short-term concerns about U.S. policies leading to a flood of safe-haven capital. Assets lacking cash flow support will ultimately become a game of hot potato—gold is one, and so is Bitcoin.
It’s important to note that Bitcoin took 28 months to recover after peaking in 2021; after the "legendary year" of 2017, it entered a nearly three-year-long winter. The duration of Bitcoin’s recent dips and whether a turning point will appear largely depend on sentiment and faith.