Bitcoin fell 32% in the first half of 2026, as major buying forces that had led the previous rally appeared to have turned to selling.

Blockchain media outlet Cryptopolitan reported on July 30 that Binance Research said in its first-half report bitcoin stayed weak as a macro reset and worsening supply-demand conditions overlapped.

Bitcoin has fallen more than 50% from its all-time high of $126,080 set in October 2025. The decline coincided with losses for a third straight quarter. The report said bitcoin suffered the biggest shock among major asset classes during a broad global price reset known as “re-anchoring.” It also said the market’s basic structure was more solid than in the previous cycle.

The report cited changing expectations for U.S. Federal Reserve policy as a key variable behind the first-half decline. Markets had priced in steep rate cuts through August 2024, but by mid-2026 they had priced in a policy path above actual rates. They also priced in an about 80% chance of a rate hike in December. New Fed chair Kevin Warsh focused on inflation over employment at his first news conference, and short-term Treasury yields rose afterward. Over the past year, bitcoin’s price moved almost opposite to this reset.

Japan was also cited as another source of pressure. The Bank of Japan’s balance sheet shrank 16.4% from its 2024 peak. Even after raising rates to 1%, the yen hit a 40-year low in June at close to 162 per dollar.

U.S. stocks, by contrast, extended gains over the same period. The report said AI hardware investment accounted for about 40% of first-quarter gross domestic product growth, surpassing the contribution from consumption for the first time since 2009. Binance Research said the market’s pricing of the Fed path was overly hawkish. On the second-half outlook, it said, “The AI capex cycle points to a slowdown rather than a halt,” and “the driver of returns has shifted from valuations to earnings.”

On-chain indicators showed the market had moved deep into capitulation. As of the end of June, about 10.83 million BTC were in unrealised loss, exceeding 9.22 million BTC in unrealised profit. It was the first time in this cycle that loss holdings outstripped profit holdings. The report said, “Taken together with a decline of more than 50% and 275 days since the October 2025 peak, we still cannot be sure of a bottom through the fourth quarter of 2026.”

In terms of market share, bitcoin still maintained the upper hand. It accounted for 57 to 60% of the total crypto market throughout the first half, and in selloffs it still served as the first-choice refuge. But funds during periods of declining dominance moved into stablecoins or left the market, rather than shifting into altcoins. There was no clear rotation buying into altcoins.

Bitcoin’s role as a “diversifier” also came under test, but its first-half performance was weak. When macro anxiety rose, it fell ahead of stocks, and it did not join the recovery even when a tech-led rebound followed. The report said bitcoin, traded 24 hours a day in the era of spot exchange-traded funds, reflects changes in rate expectations faster than traditional markets. It said bitcoin acted more like a liquidity-sensitive macro asset than a stable hedge in the first half.

The shift in supply-demand dynamics was more direct. Spot bitcoin ETFs recorded net cumulative outflows for the first time since their launch. In June alone, $4.5 billion flowed out, with more than three quarters coming from BlackRock’s IBIT.

Corporate treasury-strategy demand also weakened. Buying for corporate holdings effectively depended on Strategy, but the company’s market value fell below the value of its bitcoin holdings. As a result, additional share issuance entered a phase where dilution effects grew rather than value expansion. Strategy sold 32 BTC in May and also sold 1,363 BTC at the end of June. The sales supported holdings and distribution obligations and were not a signal of a change in investment conviction.

Pressure also intensified among listed miners. As the hash price fell to a record low, the pace of miners’ selling rose to record levels. In the process, a gap widened between operators focused on bitcoin mining and those shifting weight to AI and high-performance computing contracts. That means approaches to allocating power, capital and balance sheets are changing. Over time, dependence on bitcoin selling could decline, but a parallel trend is also emerging in which resources move away from mining itself.

The report also said risks from quantum computing to bitcoin’s cryptographic system shifted in the first half from theoretical debate to a stage of practical preparation. Draft protocols began to circulate, and it emerged as a long-term review task for institutional investors. In the second half, the bitcoin market is expected to hinge on the rate path, ETF fund flows, and whether selling pressure from corporates and miners eases.