Bitcoin Shows Smaller Pullbacks as Institutions Anchor Demand
US:BTC:Bitcoin briefly dipped below $112,000 Friday morning — its lowest level since early August — before rebounding alongside risk assets in the post-Jackson Hole rally. Just a week earlier, the cryptocurrency hit a new record near $125,000, its fifth all-time high of 2025.
David Duong, head of institutional research at Coinbase, said the trend of progressively smaller drawdowns highlights how institutional demand and regulatory clarity are reshaping bitcoin as an asset class. “Both the rally year-to-date and the trend of progressively smaller drawdowns has a lot to do with the growth in institutional demand, supported by greater regulatory clarity,” he noted.
Bitcoin’s recent 10% retreat from its Aug. 14 peak of $124,496 was only slightly larger than the 9% pullback from July’s $123,194 high — but much smaller than earlier declines in January and May. “The shallower drawdowns suggest increased confidence in bitcoin’s resilience … with long-term holders and corporate treasuries anchoring demand,” Duong added.
Over the past three, five and 10 years, bitcoin has gained 455%, 913% and 51,600%, respectively, even as it has endured several 70% drawdowns. Veteran holders argue that 30% declines are typical during bull market phases.
Ben Kurland, CEO of crypto research platform DYOR, echoed that view: “Each time it’s hit all-time highs and pulled back, the drawdowns have been smaller and the rebounds quicker. That’s a reflection of stronger hands, deeper conviction and a wider base of long-term holders.”
Looking ahead, traders are watching the Federal Reserve’s September meeting, where a potential rate cut could act as a catalyst. “A delay could spark short-term capitulation before the next leg higher,” Kurland said, but added that the eventual easing cycle could align with the final push of this bitcoin run.
The cryptocurrency last halved in April 2024, an event that has historically marked the start of new bull market phases.
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