Bitcoin Tracks 2022 Bear Market with 98% Correlation as ETFs Garner $220M

Bitcoin is eerily reflecting its previous bear market in 2022, showing a staggering correlation as the year draws to a close.

Key Takeaways

Bitcoin is closely following the trends of the 2022 bear market as we near the year-end.
November has historically been one of the worst months for Bitcoin prices.
Institutional investments are re-entering the crypto market, particularly into ETFs, with significant inflows.

Bitcoin seems to mirror the unsettling patterns of the 2022 bear market as we approach the conclusion of 2025. November has proven to be particularly tough for Bitcoin's price action, historically ranking as one of the worst months. However, there are signs of increased inflows into stocks, suggesting institutional capital is returning to crypto ETFs.

Bitcoin 2022 bear market correlation hits 98% as ETFs add $220M

Insight into Bitcoin Price: “It Feels Bad Because It Is Bad”

Recent analysis by network economist Timothy Peterson paints a grim picture for Bitcoin prices, revealing how this year closely resembles 2022. Bitcoin has dropped 36% from its all-time highs, leaving many bulls disappointed during a time when optimism about upcoming gains was prevalent. As December begins, the BTC/USD pair is showing little optimism, with Peterson noting that it mirrors the last bear-market bottom.

According to Peterson, the correlation between Bitcoin's performance this year and 2022 is alarming. Daily correlations have reached 80%, while monthly correlations have soared to 98%. His data suggests that if historical patterns hold true, we might not see a meaningful Bitcoin price recovery until late in the first quarter of next year.

BTC price correlation data. Source: Timothy Peterson/X

Peterson expressed his concerns about November’s performance, stating, “It feels bad because it is bad.” This sentiment echoes through previous analyses, indicating an ongoing struggle for Bitcoin prices in November.

BTC price November performance comparison. Source: Timothy Peterson/X

As reported by Cointelegraph, a poor November for BTC/USD historically leads to a similar December, although typically with less pronounced declines.

Possible Shift in Investor Sentiment Towards Crypto ETFs

Despite the current bear market, there is potential for a classic “Santa rally” in risk assets still to come before the year ends.

Crypto assets have suffered significantly more than equities over the past month. However, signs of a revival are appearing. Reports from Bloomberg and JPMorgan indicate “massive inflows” have been observed in US equities, with $900 billion added since November 2024 and $450 billion in just the last five months.

“By contrast, other asset class funds have only gained around $100 billion,” The Kobeissi Letter noted.

Macro asset class inflows. Source: The Kobeissi Letter/X

Additionally, data concerning US spot Bitcoin and Ether exchange-traded funds (ETFs) suggest that the worst of the institutional sell-off may be behind us. Bitcoin ETFs recorded $220 billion in inflows as the holiday week approached, while Ether ETFs acquired $312 million.

US spot Bitcoin, Ether ETF netflows (screenshot). Source: Farside Investors

In conclusion, while Bitcoin and the broader crypto market face challenges, the return of institutional investors through ETFs may offer glimmers of hope for a turnaround in the near future.