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Investment firm suggests Bitcoin may decline an additional 30% as four-year cycle intensifies.
Bitcoin is currently entrenched in a significant bear market and could potentially decline by an additional 30% in 2026, the firm stated.
Investment firm forecasts a further 30% decline in bitcoin.
Key points:
- Bitcoin is currently entrenched in a severe bear market and may decline by another 30% in 2026, as stated by CK Zheng of ZX Squared Capital.
- Zheng contends that predictable investor behavior reinforces bitcoin’s four-year boom-and-bust cycle, maintaining its status as a speculative asset rather than a safe-haven like gold.
Bitcoin is firmly in the deepest level of the bear market and the situation may deteriorate, according to CK Zheng, founder of ZX Squared Capital.
"Bitcoin’s price is clearly in significant bear market territory at this point. We anticipate a further 30% drop in price during 2026 as the Iran conflict begins," Zheng communicated to CoinDesk via email, referencing the “four-year cycle” as a key factor.
The leading cryptocurrency has already seen its value nearly halved since reaching a historic peak of over $126,000 in October of the previous year, as per CoinDesk data. As of this writing, it is trading at approximately $68,000.
The four-year bitcoin cycle
Crypto investors frequently discuss the “four-year cycle” – a pattern in which prices rise, fall, and subsequently recover, centered around the quadrennial mining reward halving.
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The halving, most recently executed in April 2024, is a scheduled event that reduces bitcoin’s supply expansion rate by half every four years. Currently, 3.125 BTC are emitted as rewards for each block mined on the Bitcoin network, down from the original 50 BTC at launch following four halving events.
Historically, bitcoin’s price has tended to peak approximately 16–18 months following a halving, followed by a bear market that typically lasts about a year.
BTC reached its peak in October of last year, roughly 18 months post the April 2024 halving, indicating that the cycle is repeating. Therefore, the bear market may intensify in the near future.
Zheng noted that the cycle is proving to be exceedingly difficult to disrupt. He attributes this to a simple reason: human psychology.
"The momentum of the ‘Four-year crypto cycle’ is gaining traction and is remarkably challenging to break due to individual investors’ psychological tendencies," Zheng stated.
Individual investors often display predictable behavior—purchasing during periods of excitement and selling during moments of panic. This behavior reinforces the boom-and-bust four-year pattern that has characterized crypto markets for over a decade.
Consequently, Zheng remarked that bitcoin continues to behave more like a speculative asset rather than a safe haven akin to gold.
He also mentioned that the institutional acceptance of bitcoin remains sluggish and limited at this stage and cautioned that certain firms that have acquired bitcoin as a treasury asset may be compelled to sell, resulting in a more pronounced price decline.
"The overall size of crypto ETFs and Digital Asset Treasury companies constitutes only around 10% of the entire crypto market. Some Digital Asset Treasury firms may be obliged to liquidate cryptos to fulfill specific debt servicing obligations during this bear market, potentially creating a detrimental cycle," Zheng noted.
At present, Zheng’s perspective is clear: the bear market for crypto may have further to extend prior to the onset of the next cycle.
