🗒️ Market update

April 2026: Bear market rally or was $60k in February the bottom?

Bitcoin (and the broader crypto market) has shown notable resilience in the face of Iran conflict–induced volatility. Price action has at times felt almost engineered—markets regularly bid late in the week only to reverse early the next, or vice versa. Combined with increasingly hyperbolic commentary from both sides, the environment has felt closer to reality TV than a kinetic war.

What has been clearer, however, is the shift in market structure. The persistent sellers that defined the prior five-month drawdown have largely been exhausted, replaced by a more stable cohort of structural buyers.

Looking back, the sell-off increasingly resembles the final phase of prior bear markets. A prolonged grind lower—nearly 50% peak-to-trough—tests conviction among late-cycle entrants. Typically, this process ends in a broad capitulation, where marginal holders exit and stronger hands step in to stabilise price. Momentum indicators like RSI reflected this dynamic, reaching deeply oversold levels before beginning the kind of recovery that has historically marked the start of multi-year uptrends.

Who stepped in to buy?

The answer is materially different to prior cycles: ETFs and MicroStrategy (MSTR).

Year-to-date, MSTR has purchased approximately $11bn worth of BTC, while ETF flows—after a soft start to the year—are re-accelerating, approaching $2bn net inflows. This is not reflexive, momentum-driven demand; it is programmatic and capital-structured buying.

MSTR’s activity has been further amplified by the success of STRC, a preferred instrument with a variable dividend currently yielding ~11.5% p.a. in weaker markets. This structure has effectively created a counter-cyclical funding mechanism for Bitcoin acquisition, contributing roughly $6bn of incremental buy pressure so far this year. Demand has been strong enough that distributions are shifting to a twice-monthly cadence, smoothing what had become lumpy, mid-month inflows.

At the same time, institutional access continues to broaden. Morgan Stanley’s BTC ETF has gathered $184m in inflows within its first two weeks. Goldman Sachs is preparing a similar product with an income overlay, and Charles Schwab, overseeing ~$12tn in client assets, is expected to enable spot crypto trading in the first half of this year (not long left in H1!).

This matters because these buyers behave differently. They are not momentum tourists. With typical recommended allocations of 2–4%, drawdowns do not trigger liquidation, they trigger rebalancing. Weakness becomes a source of demand, not supply.

The setup into April carried many of the hallmarks of a completed distribution phase: five consecutive months of declining prices, deeply negative funding rates, and visible miner selling.

Importantly, miner flows this cycle appear less about distress and more about reinvestment. Many are reallocating capital toward AI compute infrastructure, creating optionality to pivot between hash and high-performance compute depending on relative economics. That is a very different signal to prior cycles, where selling was often existential.

This is what bottoms tend to look like. Forced sellers exit. Weak hands capitulate. The remaining holder base is structurally less sensitive to price.

On-chain data supports this shift. For only the second time in 2026, wallets holding more than 10,000 BTC recorded net inflows. Whale accumulation into weakness remains one of the more reliable bottoming signals in this market.

Technically, Bitcoin still trades below its 200-day EMA (~$84k), so a strict interpretation would classify the current move as a rally within a broader downtrend. The $80k region also carries overhead supply from the November range. The downtrend has been challenged—but not definitively broken.

Positioning adds another layer.

Funding rates in perpetual futures have remained negative for most of the consolidation since early February (and the $60k low), meaning participants are paying to maintain short exposure. As Bitcoin pushes back toward $80k, the market remains skewed toward downside hedging rather than upside participation.

In isolation, that reads as bearish sentiment. In context, it is the opposite.

Deeply negative funding is a contrarian signal. It implies the market is already positioned for further downside. When price rises in that environment—driven by spot demand rather than leverage—short positioning becomes fuel. Covering begets covering.

The combination of flat-to-negative funding, rising ETF inflows, and whale accumulation is one of the cleaner setups this asset class produces. This is a spot-led move, not a leverage-driven one—which materially reduces the risk of reflexive unwinds.

🗓️ Key dates to watch

• 30 April – FOMC meeting / Core PCE / GDP estimate

• 2 May –  ISM PMI

• 6 / 8 May – JOLTs & Non Farm Payrolls

• 12/13 May – CPI/PPI

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