Bitcoin's price fell 22% in the first quarter of 2026, breaking below three major on-chain support levels, but long-term holders used the decline to accumulate at the fastest pace in six years, according to ARK Invest's Q1 Bitcoin Quarterly.
Supply held by so-called conviction buyers, addresses that exhibit low spending patterns over long periods, climbed from 2.13 million BTC to 3.60 million BTC between January and March, a 69% increase representing roughly 1.47 million BTC absorbed in three months.
ARK described the pace as the fastest absorption phase since the 2020 cycle, a period that preceded a sustained rally.
The accumulation occurred against a backdrop of deteriorating price structure.
Bitcoin closed the quarter near $68,200, having broken below the 200-day moving average at $90,613, the short-term holder cost basis at $82,767 and the on-chain mean at $78,039.
Supply in profit compressed from 78% to 50% but did not fall below the supply-in-loss threshold, a level ARK identifies as a marker of deep capitulation in previous cycles.
Spot bitcoin exchange-traded fund (ETF) balances closed the quarter near 1.29 million BTC and remained roughly flat over the period, a pattern ARK attributed to steady institutional conviction.
"Such stability suggests that institutional conviction remains strong, even amid significant downside volatility," the report said.
Despite the accumulation signals, ARK warned that a durable bottom has not been confirmed.
The firm placed a potential deeper downside zone between the realised price near $54,000 and the investor price near $50,000, levels that were not breached during the quarter but could come into play if selling pressure resumes.
The divergence between falling prices and aggressive on-chain buying has become a defining feature of the current cycle, with the data presenting a mixed picture that has divided market participants.
Benjamin Cowen, chief executive of Into the Cryptoverse, told BeInCrypto that the base case remains a bottom roughly one year after the cycle's peak, pointing to October 2026 as the most likely scenario based on the timing of previous cycles.
Grayscale, the digital asset manager, took a more constructive view, arguing that bitcoin likely found a durable floor between $65,000 and $70,000 during the quarter.
ARK noted that the macro backdrop may be turning more accommodative, potentially providing a tailwind for risk assets in the quarters ahead, but stopped short of calling a reversal.
The recap
- Conviction buyers' supply jumped 69% to 3.60 million BTC.
- About 1.47 million BTC absorbed during the quarter's 22% drawdown.
- Analyst Benjamin Cowen projects cycle trough around October of 2026.