Analyst Predicts Prolonged Market Readjustment as Bitcoin Activity Decreases

Bitcoin's Entity-Adjusted Liveliness metric, which tracks the ratio of spent coin days to created coin days, peaked in December 2025, indicating a shift from the distribution phase to an accumulation phase that historically lasts between 1.1 and 2.5 years. Analyst Axel Adler Jr. suggests this signals a potential prolonged market reset. Despite this, there's no consensus on the severity of the downturn. Factors such as improved infrastructure, the introduction of crypto ETFs, and increased institutional participation may alter the traditional cycle pattern. Crypto market cap has fallen by about 49% from its peak, though retail investors are actively buying the dip. Current conditions could lead to an extended slowdown as valuations adjust to clearer regulations and more focus on revenue. However, metrics tracking long-term investors indicate they remain in profit, suggesting major rallies may only occur after significant losses.