Why is Crypto Crashing? Analyzing the 2022 Pattern

2025-12-01

Crypto markets have entered the final stretch of 2025 with a renewed wave of selling, and the pattern looks strikingly familiar. Bitcoin is tracking almost the exact path it followed during the 2022 downturn, creating concern that the cycle may not reverse until early 2026.

These similarities have prompted a closer look at why the current decline is unfolding in the same way. As conditions shift rapidly, many investors stay updated by joining platforms such as Bitrue.com for ongoing market insights.

Bitcoin’s Decline and Why 2025 Looks Just Like 2022

Bitcoin’s performance this year has surprised many traders. Instead of accelerating into December as expected, the market has retreated. Bitcoin now sits about 36 percent below its all time high. For investors who anticipated stronger demand at the end of the year, the reversal has been difficult to navigate.

What stands out most is how closely current movements resemble those seen in the 2022 bear market, where momentum gradually faded before stabilising months later.

This comparison has been highlighted by network economist Timothy Peterson, who has closely studied the relationship between the two cycles. His work shows that daily movements in 2025 and 2022 share a correlation near 80 percent.

Monthly similarities are even stronger, reaching about 98 percent. Correlations of this scale are unusual and have forced many analysts to consider whether the market is simply repeating structural behaviour seen during previous lows.

Charts accompanying this research suggest that if the pattern continues, Bitcoin might not stage a noticeable recovery until the first quarter of 2026. This outlook has influenced sentiment across the market.

Peterson noted that November ranked among the weakest ten percent of monthly performance paths since 2015. That assessment reflects the difficult conditions traders have faced throughout the final weeks of the year.

The link to 2022 becomes even clearer when looking at historical seasonality. Bitcoin delivered negative performance in November, and data shows that when November closes red, December often brings further declines. The magnitude tends to be smaller, but the pattern still matters. Traders now watch whether the market will follow this trend again or whether macro conditions could disrupt the cycle.

These overlapping indicators have led many investors to expect a delayed recovery. With correlations so high, market shifts may remain gradual rather than sharp. To stay aware of changes in momentum, some users choose to register with platforms like Bitrue.com to follow price movements and monitor liquidity flows throughout this volatile period.

Macro Conditions, Market Divergence and Why Crypto Has Not Rebounded

While crypto experiences its downturn, traditional markets have moved in the opposite direction. United States equities have been gaining strength throughout 2024 and 2025. Recent reports show equity funds receiving nearly nine hundred billion dollars in inflows since last year, with almost half arriving in the last five months. This surge signals renewed confidence in stocks and a belief that the economic backdrop is improving.

However, this enthusiasm has not transferred to crypto. Digital assets remain influenced by concerns about regulation, risk, liquidity and long term adoption trends. Investors appear to be favouring assets they consider more stable, at least for now. The contrast between equity inflows and crypto declines reflects a broader shift in risk appetite that began earlier in the year.

This divergence also mirrors what happened in 2022. Back then, equities stabilised long before crypto recovered. Bitcoin lagged behind other markets because it tends to rely on fresh liquidity and strong sentiment, both of which had weakened. The same pattern appears again in 2025, with crypto responding more slowly to improving economic signals than traditional markets.

Another factor is the expectation that a new cycle may develop in early 2026 rather than late 2025. Many investors familiar with past cycles anticipate a consolidation phase before momentum rebuilds.

They see the current stagnation as part of a natural process that often precedes a recovery. This outlook encourages caution and contributes to the slower pace seen across the crypto market.

Understanding this divergence helps explain why Bitcoin has not responded to the same drivers lifting equities. While traditional markets benefit from renewed confidence, crypto still works through the effects of earlier volatility.

For those who follow both markets closely, joining platforms such as Bitrue.com helps them track conditions in real time and understand how broader trends continue to shape digital assets.

ETF Activity, Institutional Signals and Early Hints of Stabilisation

Despite recent weakness, several indicators show that institutional participation in crypto may be returning. One of the clearest signs comes from spot Bitcoin exchange traded funds, which saw about two hundred and twenty billion dollars in inflows during Thanksgiving week.

This increase followed weeks of declines, making the reversal an important signal that larger investors may be preparing for future opportunities.

Spot Ether exchange traded funds also gained momentum, adding more than three hundred million dollars over the same period. While these figures do not guarantee immediate price recovery, they suggest that institutions are positioning themselves ahead of potential changes in early 2026.

When ETF inflows strengthen during weak conditions, it often reflects long term planning rather than short term sentiment.

These developments matter because they appear during a period where retail participation remains subdued. Historically, ETF flows have acted as an early indicator of stabilisation, even if markets continue to move sideways temporarily. The timing aligns with the broader expectation that the first months of 2026 may offer a more favourable environment for digital assets.

Still, caution remains. Bitcoin’s movements continue to follow the 2022 pattern closely, and the correlation data suggests the cycle may take more time to shift. Investors watching these dynamics are monitoring ETF inflows, liquidity trends and macro signals to determine whether the downturn is nearing its end.

Many track these indicators through platforms like Bitrue.com, where they can observe changes as they occur and adjust their strategies with better awareness.

Conclusion

Crypto markets in 2025 are showing an unusually strong resemblance to the 2022 downturn, with Bitcoin’s correlation to past price paths driving concerns about how long the decline may last.

Weak November performance, ongoing December uncertainty and the wide gap between crypto and equity sentiment have created a complex environment. Yet rising ETF inflows suggest that institutional interest may be returning quietly.

These signals point to the possibility of improvement in early 2026. For those wishing to follow these developments closely, joining platforms such as Bitrue.com can help them stay informed as market conditions continue to evolve.

FAQ

Why does Bitcoin look similar to 2022?

Recent price movements match 2022’s behaviour with correlations reaching up to ninety eight percent, suggesting the market is repeating structural patterns from that period.

Does a negative November usually lead to a negative December?

Historically, when Bitcoin closes November in the red, December often continues the decline, although losses tend to be smaller.

Why are equities rising while crypto is falling?

Equities have benefited from improving macroeconomic sentiment, while crypto faces separate pressures related to liquidity, regulation and risk appetite.