Deep Bitcoin Drawdowns Take Time To ResolveAlso Gold ETF Flows Have Overtaken Bitcoin & The CPI Drop Isn’t Confirmed by PCE
Welcome to Ecoinometrics’ Friday edition. Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis. Today we’ll cover:
The three charts this week are telling the same story from different angles. Bitcoin remains in rare drawdown territory, capital flows favour defence over risk, and the Fed’s preferred inflation measure is not confirming renewed disinflation. In other words, the broader backdrop has not materially improved. Let’s take a look. In case you missed it, here are the other topics we covered this week:
Get these professional-grade insights delivered to your inbox: Deep Bitcoin Drawdowns Take Time To ResolveSevere drawdowns change the rhythm of the market. Bitcoin is currently down roughly 52% from its peak. Over the past decade, there have only been five episodes deeper than this one. Once you enter this territory, recoveries rarely happen overnight. The only recent exception was the COVID crash, a policy-driven shock followed by extraordinary liquidity support. But that kind of backdrop does not describe today’s environment. Most deep drawdowns unfold slowly. Conditions grind, rallies fail, and confidence rebuilds gradually rather than all at once. At this depth, the key is not predicting the exact bottom. It is watching for broad shifts in risk appetite and demand that historically accompany durable recoveries. Those signals tend to develop over time, which means there is usually space to adjust exposure once the evidence improves. For now, the historical pattern argues for patience rather than urgency.
Gold ETF Flows Have Overtaken BitcoinIf you look at cumulative ETF flows since the launch of spot Bitcoin ETFs in early 2024, Bitcoin initially dominated. Capital rushed in. And even in 2025 when money started to flow into gold as well, their rise was parallel. But that trend has changed. Since November, Bitcoin ETF flows have turned into outflows, while gold flows have continued climbing. The result is that gold ETFs have now attracted more cumulative net flows than Bitcoin over the same period. The important thing to notice here is that gold is benefiting from the same environment that is weighing on Bitcoin. When investors become more defensive, capital rotates toward assets perceived as stability anchors. Bitcoin, despite the “digital gold” narrative, is not being treated that way in portfolios. In practice, Bitcoin continues to trade more like a higher-beta growth asset than like gold. And the flow data confirms that behaviour: capital is moving toward defence, not toward leveraged risk. This isn’t about narratives. It’s about how money is actually being allocated.
The CPI Drop Isn’t Confirmed by PCEThe recent CPI print suggested inflation was cooling again. But the Fed does not target CPI. It targets the PCE index. And PCE is telling a different story. Headline PCE is running around 2.9% year-on-year. Core PCE is closer to 3.0%. Core services inflation remains above 3.4%. More importantly, the recent trend is up, not declining like for the CPI. Part of the divergence with CPI likely reflects timing and data distortions. The government shutdown disrupted CPI data collection late last year, leading to gaps and imputed estimates. That can temporarily exaggerate moves in either direction. PCE did not experience the same degree of disruption due to differences in data sources, weights and methodologies. In other words, the softer CPI print is very likely to overstate the progress on inflation. For monetary policy, that ’s worth noting. If inflation is not clearly trending lower on the Fed’s preferred gauge, the urgency to cut rates simply is not there. And without easier policy or improving liquidity conditions, risk appetite remains fragile. Bitcoin, which has been trading more like a leveraged growth asset than like gold, tends naturally to struggles in that kind of environment. It’s all about trend confirmation here. And right now, PCE is not confirming a renewed disinflation cycle.
Tactical TakeawayNothing in this week’s data argues for urgency. Bitcoin is in rare drawdown territory, capital is flowing to gold, inflation is not giving the Fed room to ease and momentum is still strongly negative. That is not the kind of backdrop that produces durable recoveries. Avoid forcing trades in the middle of a regime that has not yet shifted. Let confirmation come to you. There will be time to act when conditions improve. That’s it for today. Thanks for reading. Cheers, Nick P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis. Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions. Ready for institutional-grade research that puts you ahead of the market? Click below to access our premium insights. You're currently a free subscriber to Ecoinometrics. For the full experience, upgrade your subscription.
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Friday, February 27, 2026
Deep Bitcoin Drawdowns Take Time To Resolve
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