SKN | Bitcoin Correlation with 2022 Bear Market Hits 98% Despite ETF Resurgence

Bear Market Fractal Persists as Institutional Flows Signal Reversal

As the cryptocurrency market transitions into the final month of 2025, Bitcoin (BTC) presents a stark divergence between technical price action and institutional flow data. While network economists warn that Bitcoin’s price trajectory is statistically mirroring the brutal 2022 bear market bottom, a resurgence in exchange-traded fund (ETF) inflows suggests that smart money may be positioning for a contrarian recovery.

Historical Correlation Signals Continued Volatility

According to new analysis from network economist Timothy Peterson, Bitcoin’s price performance in the second half of 2025 shares a disturbing resemblance to the crypto winter of 2022. Peterson’s data indicates that the correlation between the two periods has reached 80% on daily timeframes and a near-perfect 98% on a monthly basis.

“It feels bad because it is bad,” Peterson noted regarding November’s performance, which ranked in the bottom 10% of monthly price paths since 2015. With Bitcoin currently trading approximately 36% below its all-time highs, the technical fractal suggests that if history repeats, a genuine price recovery may be deferred until the first quarter of 2026. The historical data further implies that a negative November often precedes a negative December, potentially capping near-term upside.

Institutional Capital Returns Amid Equity Strength

Despite the bearish technical structure, flow data from the Thanksgiving trading week paints a picture of renewed institutional appetite. US spot Bitcoin ETFs recorded $220 million in net inflows, arresting a period of heavy outflows. Perhaps more notably, spot Ether ETFs outpaced their Bitcoin counterparts, securing $312 million in fresh capital.

This return to risk assets coincides with broader strength in traditional markets. Data from The Kobeissi Letter reveals that US equity funds have absorbed $900 billion in new capital over the last year, with $450 billion entering in the last five months alone. This “risk-on” environment in equities, which have attracted more capital than all other asset classes combined, could provide the macro tailwind necessary to break Bitcoin’s bearish correlation.

Strategic Outlook

The market currently sits in a state of high tension between historical price memory and real-time liquidity injections. While the 98% correlation with the 2022 bottom suggests immediate downside risk and a potentially muted end to 2025, the resurgence of ETF inflows indicates that institutional allocators view the current 36% drawdown as an accumulation zone. Investors must now determine whether the weight of historical fractals will suppress price action through year-end, or if the sheer volume of macro liquidity entering risk assets will trigger a decoupling and a late-stage “Santa rally.”