Bitcoin
Has Bitcoin Price Really Bottomed Out? What Makes Bitwise CIO Think So?
Bitcoin has absorbed a major wallet hack, Strategy BTC sales, weaker CLARITY Act hopes, and mixed ETF flows without another major collapse. Bitwise CIO Matt Hougan says that resilience may signal seller exhaustion, but BTC still needs stronger demand and a sustained break above $65,000.
Bitcoin is still trading below $65,000, far beneath its previous record high, and the market hardly looks euphoric. Yet Bitwise Chief Investment Officer Matt Hougan believes that may be exactly why Bitcoin could be approaching the end of its latest crypto winter.
His argument is not based on a technical indicator, a halving model or a dramatic price target.
It is based on something simpler: Bitcoin has started ignoring bad news.
Hougan told Bloomberg that one of the clearest signs of a bear-market bottom appears when an asset stops falling in response to negative developments that would previously have triggered heavy selling.
Bitcoin has recently endured a surprisingly dense sequence of bearish headlines.
A major Coldcard hardware-wallet vulnerability led to the theft of more than $100 million in Bitcoin.
Strategy, historically one of the market’s most aggressive corporate Bitcoin buyers, sold another 1,690 BTC worth approximately $108.6 million.
Concerns around the passage of the CLARITY Act intensified.
Strategy’s preferred security STRC fell sharply below its $100 reference level.
Bitcoin repeatedly failed to hold above $65,000.
Yet BTC did not collapse.
That resilience is the foundation of Hougan’s thesis.
Bitcoin was trading near $62,861 at the time of this analysis, meaning the market has not suddenly entered a powerful breakout phase. The more interesting question is whether the absence of another major breakdown means sellers are finally becoming exhausted.
What Exactly Did Matt Hougan Say About Bitcoin’s Bottom?
Hougan’s argument centers on market behavior rather than absolute price.
In his Bloomberg appearance, the Bitwise CIO said:
“One sign that you’re at the bottom of a bear market is when an asset stops responding to bad news.”
He contrasted this with normal bear-market psychology.
During a severe downtrend, markets often exaggerate negative information and discount positive information.
A moderately bad headline can trigger outsized selling.
A favorable development produces little reaction because investors remain defensive.
Hougan argues that Bitcoin may now be doing the opposite.
Negative events are generating surprisingly little damage, while positive developments have a greater chance of attracting attention.
He described that reversal as evidence Bitcoin may be reaching the end of the crypto winter rather than beginning another major leg lower.
Why Ignoring Bad News Can Matter at a Market Bottom
Markets do not bottom simply because the news becomes good.
In many historical markets, bottoms develop while the news remains unpleasant.
The important change occurs in investor behavior.
When nearly everyone who wants to sell has already reduced exposure, another bearish headline has fewer marginal sellers left to activate.
The news remains bad.
The supply response becomes weaker.
That is what technicians and behavioral investors sometimes describe as seller exhaustion.
Hougan’s argument effectively asks whether Bitcoin has reached that stage.
If a market can absorb:
- a nine-figure security breach;
- selling from its most famous corporate treasury holder;
- weaker regulatory expectations;
- stress inside Bitcoin-linked securities; and
- repeated resistance failures;
without creating a fresh capitulation event, then the balance between buyers and sellers may be changing.
That does not guarantee that the exact cycle low has already occurred.
It does suggest the market may be becoming harder to push materially lower.
The Coldcard Hack Was a Serious Test of Bitcoin Sentiment
One of Hougan’s examples was the Coldcard wallet incident.
Blockchain intelligence firm TRM Labs estimated that roughly $116 million worth of Bitcoin was stolen through a vulnerability affecting some Coldcard hardware wallets.
The incident reportedly involved approximately 1,816 BTC and was linked to weak seed-generation randomness associated with an older firmware configuration.
This was particularly damaging from a psychological perspective because hardware wallets are commonly marketed as one of the safest ways to store cryptocurrency.
The breach therefore struck directly at confidence in self-custody.
It also arrived during a period when crypto investors were already dealing with weak market sentiment.
Yet Bitcoin did not experience a panic-driven collapse.
That supports Hougan’s point, although an important distinction is necessary.
The Coldcard incident was not a failure of Bitcoin’s blockchain.
It was a wallet-security failure.
That difference may explain why sophisticated Bitcoin investors treated the event as serious for affected users without treating it as evidence that Bitcoin itself had been compromised.
This distinction is consistent with The Crypto Encounter’s broader analysis of why blockchain security and user-level crypto safety are not the same thing.
Did the Coldcard Hack Actually Drive Investors Into ETFs?
One theory emerging after the breach was that some investors may have preferred regulated Bitcoin ETFs rather than direct self-custody.
That narrative has some intuitive logic.
A Bitcoin ETF allows investors to obtain price exposure without managing seed phrases, private keys or hardware wallets.
But the actual ETF flow picture became more complicated as August progressed.
Data from Farside Investors shows U.S. spot Bitcoin ETFs recorded positive net flows on August 3, 4, 5, 6 and 7.
Those five sessions produced approximately:
- $170.1 million on August 3;
- $211.5 million on August 4;
- $244.4 million on August 5;
- $137.6 million on August 6; and
- $101.7 million on August 7.
That represents roughly $865 million of combined net inflows across those sessions.
However, the trend reversed afterward.
Farside data shows net outflows of approximately:
- $144.6 million on August 10;
- $61.1 million on August 12; and
- $131.1 million on August 13.
August 11 produced only a small $7.8 million net inflow.
The Farside Bitcoin ETF flow data therefore supports the argument that institutional demand strengthened strongly in early August, but it does not support the idea that ETF demand has become uniformly bullish.
That nuance matters when evaluating whether Bitcoin has truly bottomed.
Strategy Selling Bitcoin Was an Even Bigger Psychological Test
Hougan also focused on Strategy.
For years, Michael Saylor and Strategy became synonymous with aggressive corporate Bitcoin accumulation.
The company repeatedly raised capital to buy more BTC and built one of the largest corporate Bitcoin positions ever assembled.
That made Strategy’s decision to sell Bitcoin unusually significant from a sentiment perspective.
According to Strategy’s August 10 SEC filing, the company sold 1,690 BTC between August 3 and August 9.
The sale generated approximately $108.6 million at an average net price of $64,262 per BTC.
The proceeds were used to repurchase 1,152,020 shares of Strategy’s STRC preferred stock.
After the sale, Strategy still held 840,447 BTC, acquired for approximately $63.36 billion at an average cost of $75,385 per Bitcoin.
This was not a forced liquidation of the company’s treasury.
It was a capital-allocation decision involving Strategy’s preferred securities.
That distinction is critical.
Why Strategy Selling BTC Did Not Automatically Mean Bitcoin Was in Trouble
Strategy’s sale created a dramatic headline because the company has historically been one of Bitcoin’s most vocal corporate accumulators.
But the economic context matters more than the symbolism.
The company did not liquidate Bitcoin because it believed BTC was collapsing.
It sold a relatively small portion of its enormous treasury to support STRC repurchases.
The sale represented roughly 0.2% of Strategy’s remaining Bitcoin holdings.
Bitcoin absorbed the supply without a major price breakdown.
That is exactly the type of response Hougan finds significant.
In a highly fragile market, news that the world’s most famous Bitcoin treasury company had begun selling could have triggered fears of broader corporate capitulation.
Instead, the market treated the sale as manageable.
The Crypto Encounter has already examined how Bitcoin continues absorbing large amounts of supply around the $62,000 to $65,000 cost-basis zone.
Strategy’s sale became another real-world test of that absorption capacity.
Strategy’s Sale Was Not the First One
Another reason investors should not overstate the August 3-9 sale is that it was part of a broader treasury-management shift.
Strategy had already sold Bitcoin during previous weeks.
Market reports indicate the company sold thousands of BTC across several consecutive periods, using proceeds to strengthen cash reserves, fund preferred obligations and repurchase securities.
This marks a significant evolution from the simple narrative that Strategy only buys Bitcoin and never sells.
But it also demonstrates something important about institutional Bitcoin ownership.
Corporate holders may use Bitcoin as a treasury asset rather than as an untouchable reserve.
Sales can therefore happen for balance-sheet reasons without representing a bearish view on Bitcoin itself.
STRC Falling Below $100 Added Another Layer of Stress
Hougan also pointed to weakness in Strategy’s STRC preferred security.
STRC is designed around a $100 stated amount and variable dividend structure.
Its decline significantly below that level raised questions about the market’s appetite for Strategy’s expanding capital structure.
That matters because Strategy’s Bitcoin model increasingly depends on its ability to access multiple forms of capital.
Yet Bitcoin did not respond to the STRC weakness with a major selloff.
This reinforces Hougan’s behavioral argument.
Bitcoin investors may be separating stress inside Strategy’s financing machinery from the investment case for Bitcoin itself.
The CLARITY Act Became Less Certain, Yet Bitcoin Held Up
The regulatory backdrop has also weakened.
Earlier in 2026, expectations for U.S. crypto market-structure legislation created optimism that Congress could finally establish clearer rules around digital assets.
The CLARITY Act advanced through the Senate Banking Committee, but the legislative path remains uncertain.
Hougan noted that market expectations for passage reportedly fell from the mid-40% range into the teens while Bitcoin continued holding relatively firm.
That is another example of Bitcoin failing to respond to a negative catalyst in the way many traders might have expected.
The bill still matters.
But Bitcoin’s resilience suggests regulatory optimism is no longer the only support underneath the market.
Is Hougan Right That Bitcoin Is “Ignoring Bad News”?
Broadly, yes.
But the claim needs qualification.
Bitcoin has not been completely immune to negative developments.
The market has experienced repeated declines throughout the summer.
BTC has also struggled to sustain recoveries above $65,000.
The important change is not that Bitcoin has stopped falling entirely.
It is that several negative catalysts have failed to create a new cascading liquidation event.
That distinction makes Hougan’s argument more credible.
The $62K to $65K Range Complicates the Bottom Thesis
Bitcoin’s current market structure also prevents any easy declaration that the bottom is already confirmed.
The Crypto Encounter recently reported that approximately 1.79 million BTC carry a realized cost basis between $62,000 and $65,000, according to Bitfinex analysis.
That represents close to 9% of circulating Bitcoin supply.
The largest concentration reportedly sits near $63,800.
This zone can operate as both support and resistance.
Below the range, many recently acquired coins move into unrealized losses.
Near the upper end, some holders return to break-even and may sell.
Bitcoin’s resilience therefore proves that buyers are absorbing supply.
It does not yet prove buyers have enough strength to push the market into a sustained bull trend.
Bitcoin Still Has Not Solved the $65K Problem
This is the biggest technical objection to declaring a confirmed bottom.
Bitcoin has repeatedly traded above $65,000 but failed to establish sustained daily closes beyond the level.
That means sellers continue appearing near the upper end of the range.
As The Crypto Encounter reported after softer U.S. inflation failed to trigger a major BTC rally, the market’s immediate problem increasingly looks like insufficient marginal demand rather than simply bad macroeconomic news.
This is important because a bottom and a breakout are not the same event.
Bitcoin can stop falling before it begins rising meaningfully.
A Bottom Is Usually a Process, Not One Perfect Price
This distinction is essential.
Market bottoms rarely arrive with a clear announcement.
They often develop through a long period of:
- failed breakdowns;
- repeated retests;
- seller exhaustion;
- large-holder accumulation;
- weak retail conviction;
- volatile sideways trading; and
- gradual improvement in demand.
Bitcoin may therefore be forming a bottoming range without having printed the exact final low.
Hougan’s argument is better understood in this context.
He is identifying a behavioral regime change.
That is different from guaranteeing that BTC can no longer revisit $60,000 or lower.
Whales Are Giving Hougan Another Piece of Evidence
Large Bitcoin holders have also been accumulating during the recent weakness.
On-chain data cited across several market reports shows addresses holding more than 10,000 BTC accumulated roughly 46,420 BTC over a 60-day period through August 9.
At prices near the low-$60,000s, that represents close to $3 billion worth of Bitcoin.
Another cohort of wallets holding 10 to 10,000 BTC reportedly accumulated more than 20,000 BTC from late July through early August.
This does not prove a bottom.
Whales can buy before prices fall further.
But sustained accumulation during weak sentiment is consistent with the idea that stronger holders are absorbing supply from smaller or less patient investors.
The Distribution Between Whales and Smaller Holders Is Important
The whale data becomes more meaningful when compared with behavior among smaller investors.
Some recent on-chain reports suggest large wallets have been accumulating while smaller holders have reduced exposure.
That pattern often appears during difficult market periods.
Retail investors tend to become more cautious after sustained declines.
Larger investors with longer time horizons may use those periods to accumulate.
If the divergence continues, it would strengthen the argument that ownership is moving toward participants with greater willingness to hold through volatility.
That can gradually reduce available selling pressure.
Bitcoin ETFs Provide a Second Institutional Demand Channel
Whales are not the only potential source of structural demand.
Spot Bitcoin ETFs continue to provide a channel through which institutional and traditional-market investors can gain exposure.
The early-August inflow streak was significant.
But the reversal in flows after August 7 shows why the ETF story must remain balanced.
Institutional demand is present.
It is not yet one-directional.
That structural access is one reason Hougan expects wealth-management platforms to become important later in the year.
Why Hougan Thinks Wealth Managers Could Drive the Next Leg
Hougan believes the next major catalyst may come from wealth-management distribution.
The argument is straightforward.
Bitcoin ETFs have made the asset available inside conventional brokerage and advisory systems.
But access does not automatically mean advisers have fully incorporated Bitcoin into client portfolios.
Large wealth-management platforms often move cautiously.
They conduct due diligence.
They create allocation guidelines.
They train advisers.
They determine which client types are suitable for crypto exposure.
They decide whether Bitcoin can be held inside model portfolios.
If more large platforms move from merely allowing Bitcoin ETFs to actively approving or recommending modest portfolio allocations, the demand effect could be much larger than individual retail ETF purchases.
Why Wealth-Management Demand Could Matter More Than Another Crypto Narrative
Crypto-native demand can move quickly.
Wealth-management capital can move slowly but operate at enormous scale.
A relatively small recommended Bitcoin allocation across trillions of dollars in managed assets could create substantial incremental demand.
This is the institutional adoption thesis Hougan has emphasized for years.
The potential importance comes from repetition.
An adviser recommending a 1% or 2% Bitcoin allocation across thousands of client accounts creates a very different demand profile from one trader making a speculative purchase.
It can also create periodic rebalancing flows.
That would give Bitcoin a more persistent source of capital.
But Wealth Managers Have Not Yet Proven Hougan’s Thesis
This remains a forward-looking expectation.
Investors should not treat anticipated wealth-management adoption as guaranteed future buying.
Financial advisers must consider suitability, volatility, regulatory requirements and client preferences.
Some platforms may allow Bitcoin ETFs without recommending them.
Others may impose allocation limits.
Risk committees can move slowly.
Bitcoin’s continued volatility may also discourage conservative clients.
Hougan’s catalyst is plausible.
It has not yet fully arrived.
The Macro Environment Is Becoming Less Hostile
Another factor supporting the bottom thesis is the gradual improvement in inflation conditions.
July U.S. CPI rose 0.1% month over month and 3.4% annually.
Core inflation rose 0.2% for the month and 2.5% year over year.
Producer prices also showed signs of cooling.
This reduces some of the pressure on the Federal Reserve to tighten policy aggressively.
Bitcoin has not responded strongly to the softer data, which initially looks disappointing.
But from Hougan’s perspective, it may fit the bottoming process.
The market is absorbing bad news while gradually gaining a more favorable macro backdrop.
The Fed Is Still a Major Risk
The macro environment is not fully supportive yet.
The Federal Reserve kept rates at 3.50% to 3.75% in July, and three officials dissented in favor of a quarter-point increase.
That unusually hawkish split shows inflation concerns remain alive.
If inflation accelerates again or Treasury yields rise sharply, Bitcoin could still face renewed pressure.
Bad-News Resilience Is Powerful, but It Is Not Enough Alone
Hougan’s framework is useful because market reaction often contains more information than the headline itself.
But no single behavioral indicator can confirm a bear-market bottom.
Several additional conditions would strengthen the case.
1. Bitcoin Needs to Hold the Low-$60K Region
The market has repeatedly found demand above roughly $60,000.
A sustained break below that area would weaken the seller-exhaustion thesis.
2. Bitcoin Needs to Reclaim $65,000
A true recovery requires buyers to do more than defend support.
They must eventually overpower resistance.
3. ETF Flows Need to Stabilize
The early-August inflow streak was constructive.
The later outflows show institutional demand remains uneven.
4. Whale Accumulation Needs to Continue
Persistent accumulation would support the idea that stronger holders are absorbing supply.
5. Macro Conditions Need to Avoid Another Shock
Oil, geopolitical risk, Treasury yields and Federal Reserve policy remain capable of changing the market quickly.
What Would Prove Hougan Wrong?
A good market thesis should identify its failure conditions.
Hougan’s argument would weaken materially if Bitcoin begins reacting violently to negative developments again.
Several developments could challenge the bottom thesis:
- a decisive break below $60,000;
- renewed ETF outflows lasting several weeks;
- large-scale whale distribution;
- another major corporate Bitcoin liquidation;
- a sharp deterioration in global equities;
- renewed inflation acceleration;
- higher-for-longer Fed expectations; or
- a significant liquidity shock.
The key issue would not be one bad headline.
It would be the return of disproportionate downside reactions.
Why the Current Market Looks Different From a Classic Crypto Capitulation
Previous crypto winters often ended in visible panic.
Leverage disappeared.
Major companies failed.
Retail investors abandoned the market.
Liquidity collapsed.
Bitcoin experienced violent downside moves.
The current environment is different.
There has been substantial deleveraging and a major price decline from the cycle high, but Bitcoin remains supported by:
- spot ETFs;
- institutional custody;
- corporate treasury demand;
- wealth-management infrastructure;
- large-holder accumulation; and
- a more developed derivatives market.
This may produce a bottom that looks less dramatic than previous cycles.
Instead of one spectacular capitulation candle, Bitcoin could spend months transferring supply from weaker holders to stronger ones.
The Market May Be Bottoming Before Sentiment Feels Bullish
This is another reason Hougan’s argument deserves consideration.
Market bottoms rarely feel comfortable.
If investors already felt confident, prices would usually have moved higher.
Today’s Bitcoin market still contains:
- regulatory uncertainty;
- ETF flow volatility;
- corporate treasury stress;
- resistance around $65,000;
- macro uncertainty; and
- weak retail enthusiasm.
Those conditions sound bearish.
They can also describe the environment in which long-term buyers begin accumulating before sentiment improves.
Has Bitcoin Really Bottomed Out?
The evidence supports a more careful answer than either “yes” or “no.”
Bitcoin may be in a bottoming process, but the final cycle low is not yet confirmed.
Hougan has identified a legitimate behavioral signal.
The market has absorbed several bearish events without producing another major capitulation.
Large holders have accumulated.
Institutional access continues expanding.
The macro environment is becoming somewhat less hostile.
Those are meaningful positives.
But Bitcoin remains below $65,000.
ETF flows have recently turned mixed again.
The $62,000 to $65,000 ownership cluster remains heavy.
The Federal Reserve has not declared the inflation battle won.
The market therefore has evidence of stabilization without definitive evidence of a new bull trend.
The Crypto Encounter Take
Matt Hougan’s bottom thesis is more interesting than a traditional Bitcoin price prediction because it focuses on behavior.
Bitcoin has been given multiple reasons to fall.
It has refused to collapse.
That matters.
The Coldcard hack tested confidence in self-custody.
Strategy tested the market with direct Bitcoin selling.
CLARITY Act expectations weakened.
STRC showed stress.
ETF flows became volatile.
Bitcoin still remains in the low-$60,000 range rather than entering another uncontrolled decline.
That suggests sellers may be losing power.
But seller exhaustion is only the first half of a bottom.
The second half requires demand strong enough to push price out of the range.
That is where Hougan’s thesis still needs confirmation.
A sustained move above $65,000, stronger ETF demand, continued whale accumulation and improving wealth-management adoption would turn the argument from interesting to convincing.
Until then, the most accurate description may be this:
Bitcoin is starting to behave like an asset that may have stopped searching for a lower floor, even though it has not yet found the strength to build a new ceiling.
Frequently Asked Questions
Does Matt Hougan think Bitcoin has already bottomed?
Bitwise CIO Matt Hougan believes Bitcoin may be at or near the bottom of the current crypto winter because recent negative developments have failed to trigger major additional price declines.
Why does ignoring bad news suggest a market bottom?
When most weak or fearful holders have already sold, additional negative news can produce less selling pressure. Markets sometimes begin bottoming when bad news stops creating disproportionate downside reactions.
What bad news has Bitcoin recently absorbed?
Recent negative developments include the Coldcard hardware-wallet hack, Strategy selling Bitcoin, weakness in Strategy’s STRC preferred stock, uncertainty around the CLARITY Act and repeated failures to hold above $65,000.
How much Bitcoin did Strategy sell?
Strategy sold 1,690 BTC between August 3 and August 9, 2026, for approximately $108.6 million at an average net sale price of $64,262 per Bitcoin, according to its SEC filing.
Why did Strategy sell Bitcoin?
Strategy said the proceeds were used to repurchase STRC preferred stock. The transaction therefore represented a treasury and capital-allocation decision rather than evidence that Strategy had abandoned its broader Bitcoin strategy.
How much Bitcoin does Strategy still hold?
Strategy reported 840,447 BTC as of August 9, 2026, after the 1,690 BTC sale.
How large was the Coldcard hack?
TRM Labs estimated that roughly $116 million worth of Bitcoin, involving about 1,816 BTC, was stolen through a vulnerability affecting some Coldcard hardware wallets.
Are Bitcoin ETFs currently seeing inflows?
ETF flows have been mixed. U.S. spot Bitcoin ETFs recorded strong positive flows during several sessions in early August, followed by notable net outflows on August 10, 12 and 13. This indicates institutional demand remains active but inconsistent.
Are Bitcoin whales accumulating?
Recent on-chain data suggests large Bitcoin holders have been accumulating. Wallets holding more than 10,000 BTC reportedly added approximately 46,420 BTC over a 60-day period through August 9.
What price would strengthen the Bitcoin bottom thesis?
A sustained recovery above $65,000 would strengthen the case because Bitcoin has repeatedly failed to establish itself above that resistance area. Continued support above the low-$60,000 region would also be important.
Could Bitcoin still fall below $60,000?
Yes. Hougan’s view is an analytical thesis rather than a guarantee. A macroeconomic shock, sustained ETF outflows, whale selling, higher interest-rate expectations or a breakdown in market structure could push Bitcoin lower again.
What does Bitwise think could drive Bitcoin higher later in 2026?
Hougan expects broader wealth-management adoption of Bitcoin ETFs to become an important potential catalyst. If large advisory platforms begin incorporating Bitcoin into client portfolios more systematically, that could create additional structural demand.
Is a Bitcoin bottom the same as the start of a bull market?
No. A market can stop falling and spend a prolonged period consolidating before a new uptrend begins. Bitcoin may be stabilizing without having confirmed a sustained bullish breakout.
Disclaimer
This article is for informational and educational purposes only and does not constitute financial, investment, trading, legal or tax advice. Bitcoin and other cryptocurrencies are highly volatile and may experience significant losses. Analyst opinions, market behavior, ETF flows, whale activity and historical patterns cannot guarantee future price movements. Readers should conduct independent research and consult qualified financial professionals before making investment decisions.