The first phase of bitcoin’s BTC$72,578.05 recent drawdown has not triggered panic among institutional investors, according to crypto asset management firm CoinShares.

Professional allocators reduced exposure modestly but largely maintained their positions compared with last year. Advisors trimmed holdings while hedge funds scaled back alongside the broader leverage unwind and shifting opportunities in other markets, the crypto investment manager said in a Tuesday report.

Longer-duration investors kept accumulating. "Endowments, pensions, and sovereigns continued to build quietly," wrote analyst Matt Kimmell.

Bitcoin has struggled to regain momentum since hitting a record high near $125,000 in early October. The world's largest cryptocurrency was trading around $72,370 at publication time.

Crypto markets have delivered muted performance in recent months as a mix of macro and market-specific pressures weighed on prices. Higher interest rates and a stronger dollar have dampened appetite for risk assets, while leveraged positions built earlier in the rally have been unwound. At the same time, profit-taking from long-term bitcoin holders and uneven flows into spot exchange-traded funds (ETFs) have limited momentum, leaving the sector struggling to regain a sustained upward trend.

Despite bitcoin falling about 23% during the period, global bitcoin ETF flows remained positive, suggesting the sell-off in the fourth quarter was driven more by long-time holders taking profits than by new institutional money exiting the market, Kimmell said.

Historically, crypto bear markets have redistributed supply from short-term traders to long-term holders. According to Kimmell, the emergence of ETFs now offers a new way to observe whether institutional capital follows the same pattern.

So far, the data points in that direction. A roughly 25% quarterly drawdown did not trigger broad institutional capitulation, the report said, with most declines in assets under management reflecting price moves rather than large investor outflows.

Still, CoinShares cautioned that the sample size remains small. The firm said the real test may appear in upcoming regulatory filings, which will capture institutional behavior during sharper moves, including bitcoin’s slide toward $60,000 and a single-day 17% drop.

Bitcoin and the broader crypto market moved higher this week, rebounding after weeks of choppy trading. The rally was driven in part by renewed risk appetite across markets and steady demand for bitcoin ETFs, helping the largest cryptocurrency regain momentum and lift major altcoins alongside it. Traders also pointed to short covering and positioning resets following the recent sell-off as factors behind the move.

Read more: CEO of crypto investment firm Keyrock says bitcoin is undervalued, entering ‘transition year’