Bitcoin Could Drop Another 30% as Bear Market Deepens, Analyst Says

Bitcoin has entered what some analysts describe as the most severe stage of its current downturn, and the decline may not be over yet. According to CK Zheng, founder of crypto investment firm ZX Squared Capital, the cryptocurrency could fall by as much as 30% more in 2026.

Zheng believes bitcoin is already firmly in bear market territory and pointed to the ongoing conflict involving Iran, along with the historical four-year market cycle, as key factors that could push prices lower.

“Bitcoin’s price is clearly in deep bear market territory now,” Zheng said in comments to CoinDesk. “With the Iran war beginning, we expect another 30% drop in 2026.”

Bitcoin has already experienced a sharp pullback. After climbing to a record high above $126,000 in October last year, the asset has lost nearly half of its value. At the time of writing, bitcoin was trading near $68,000, according to CoinDesk data.

The Four-Year Market Cycle

Many crypto investors follow bitcoin’s so-called four-year cycle — a pattern in which the market experiences a strong rally, reaches a peak, and then enters a period of decline before eventually recovering. The cycle is closely tied to the bitcoin halving, a programmed event that reduces mining rewards roughly every four years.

The most recent halving occurred in April 2024, lowering the reward to 3.125 BTC for each block mined. When bitcoin first launched, the reward was 50 BTC, but it has gradually decreased through four halving events.

Historically, bitcoin prices tend to peak around 16 to 18 months after a halving. This is typically followed by a bear market that lasts roughly a year before a new recovery phase begins.

Since bitcoin reached its most recent high in October — approximately 18 months after the April 2024 halving — the current market appears to be following the same historical pattern. If that trend continues, the downturn could deepen further.

Psychology Keeps the Cycle Intact

Zheng believes the persistence of the four-year cycle is largely driven by investor psychology.

Retail investors often enter the market during periods of optimism and rising prices but quickly sell when markets begin to decline. This behavior reinforces the boom-and-bust rhythm that has defined the cryptocurrency market for years.

“The four-year crypto cycle is gaining momentum and is very difficult to break because of the psychological behavior of individual investors,” Zheng said.

Because of this dynamic, he believes bitcoin still trades more like a speculative asset than a traditional safe-haven investment such as gold.

Institutional Adoption Still Small

Although institutional participation in the crypto market has increased in recent years, Zheng believes its overall impact remains limited.

He estimates that crypto exchange-traded funds and companies holding bitcoin as part of their treasury strategies account for only about 10% of the total crypto market.

Zheng also warned that some companies that have accumulated bitcoin could face pressure if market conditions deteriorate further. Firms that used debt to acquire bitcoin may need to sell part of their holdings to meet financial obligations, potentially adding to market selling pressure.

“The total size of crypto ETFs and digital asset treasury companies is only about 10% of the entire crypto market,” Zheng said. “Some of these companies may be forced to sell crypto assets to meet debt servicing requirements during the bear market, which could create a negative cycle of further price declines.”