BITB: Further Downside Likely Before Reaccumulation Kicks Off

Summary Bitwise Bitcoin ETF offers pure Bitcoin exposure currently facing a 44% drawdown from its all-time high. BITB is in a pronounced downtrend, driven by macro 'Risk-Off + Stagflation' conditions and persistent ETF outflows. On-chain metrics signal deep capitulation, with DCA accumulation thresholds around $54.6k, suggesting further downside before reaccumulation. I recommend holding BITB and employing dollar cost averaging while closely monitoring inflation expectations and macroeconomic shifts. Introduction & Thesis TradingView The price of Bitcoin has fallen from its all-time high (ATH) by 44% and continues in free fall since October 7, 2025, when it hit $126,000. Today it is a $70,000 price tag and continues to slide downwards. It was on January 20 when Bitcoin broke its average of 50 sessions, which has caused an acceleration of its fall to current levels. This downward rupture is important to understand price dynamics, as it has historically acted as a psychological point in the creation of bear markets. In addition to this, and as can be seen in the previous image, my Bitcoin trend indicator, composed of the LSMA (Least Squares Moving Average) of the price, indicates the existence of a downward trend in the price (red line). Fund Website Fund Website Today we will analyze Bitcoin, using the listed vehicle Bitwise Bitcoin ETF ( BITB ). As the reader familiar with digital assets will know, this ETF aims to track the spot price of Bitcoin, so performing an analysis of the underlying asset (Bitcoin) is entirely relevant at this point. As the reader can see in the image above, it is an ETF that has only one holding (Bitcoin), with more than 35,000 coins in its portfolio and a 100% ETF exposure to this asset. In addition to this, it can be seen how, at the cost level, the fund has an associated sponsor fee that discounts from the NAV on an annual basis. Bitbo At the level of ETF currency flows, it can be seen that in recent days there have been accumulated outflows of USD 210 million and inflows of USD 84 million. This behavior extrapolated to the rest of the ETFs has constituted a selling force throughout the beginning of 2026. For the time being and with respect to the investment thesis, I recommend holding the vehicle in your portfolio if you have it and going to DCA (dollar cost average) to average purchases in drops as it is at a lower average price. I have no doubt about Bitcoin as an asset, but I would never sell it underwater or buy it in a slump because of its volatile nature. Macro Fundamental - Proxy TradingView In the graph above, we can observe the spot price of Bitcoin with a more macro market regime, which explains the fall of the Bitcoin price from its historical high (red zone). Shaded areas identify weekly macro regimes based on the relative strength of the risk block (BTC/ETH/SPY) against Treasury bond developments and against an inflationary impulse as measured by oil and metal performance (see gold). After hitting highs, Bitcoin has entered, according to the chart, a “Risk-Off + Stagflation” environment (red), where the risk axis turns negative (de-risking) while the inflationary momentum remains high, which usually translates into tighter financial conditions and compression of risk premia. This, I comment, can be clearly seen in the table attached to the chart in the cells for risk score (z) and inflation score (z). With scores of -1.2 and 2.2, respectively, clearly indicate that, on the one hand, the crypto sector is having bad momentum (performance), influenced by a large rally of raw materials, which marks a future inflationary boost of the economy. This means that Bitcoin may be anticipating a larger-than-expected inflation rally than the market expects. If this happens, central banks will be forced to raise rates again, tightening financial conditions and triggering a general bear market, which I do not see at the moment. TradingView On a technical level and on a positive note, we can see that in the analysis of the weekly chart, there is a divergence between the behavior of the price of Bitcoin and the RSI indicator. It is currently at very depressed levels (high oversell), similar to those of the FTX collapse. I believe that if geopolitical tensions, macroeconomics, and liquidity go hand in hand, there may be a reversal in the short term. Provided that the scenario discussed in the previous metric is not met. On-Chain Perspectives CryptoQuant CryptoQuant If we look at the on-chain metrics, we can see how the two indicators above probably reinforce the claim that the market is trying to clean up dubious participants to return to a phase of reaccumulation. The adjusted NUPL (Net Unrealized Profit Loss) metric is being compressed, reaching a negative zone, where historically extreme capitulation phases have occurred. The point here is to understand whether this is transitory or not and the duration of the capitulation phase itself. In my opinion, with such an oversold asset, I think it is likely to catch up in the coming weeks before deciding again on the direction of the price. The second metric I propose (DCA Cycle) puts the target accumulation threshold around a price of 54.6k currently. This suggests that, if the selling pressure and the adverse macro regime persist, the market could still look for higher-quality soil below before reconstructing the commented trend. So that point would be a good point of purchase. Fundamentally, I have no doubt about Bitcoin. I believe that in the long term it is an asset that will do well because of the characteristics it has and the technology behind it. While I think it has recently lost its “safe-haven asset” feature, if we measure that feature as the correlation of bitcoin vs. gold. Institutional demand and legal certainty over assets have increased significantly. Final Thoughts In the short term, I expect a small reversal of the price upwards due to the divergence of the existing IHR on a weekly level. In the medium term, the performance of the asset will depend very much on the evolution of macroeconomic variables (liquidity, inflation, and growth), especially in the United States. I recommend the reader monitor the variable inflation, looking at swaps and futures on inflation, since they discount a higher inflation than the current one, which can make the monetary policy of the central banks vary. Such a scenario would be dangerous for risky assets, especially cryptocurrencies. With all this in hand, I recommend holding for the moment. Thank you for reading.