Bitcoin is stuck in the deepest phase of the bear market, and the pain could get worse, according to CK Zheng, founder of crypto investment firm ZX Squared Capital.
“Bitcoin’s price is convincingly in deep bear market territory now. We expect another 30% price drop during 2026 when the Iran war started,” Zheng told CoinDesk in an email, citing the “four-year cycle” as one of the main catalysts.
The world’s largest cryptocurrency has already nearly halved since hitting record highs of over $126,000 last October, according to CoinDesk data. At the time of writing, it changed hands for about $68,000.
The four-year bitcoin cycle
Crypto investors often talk about the “four-year cycle” – a pattern in which prices rise, crash, and then recover, centered on the halving of the mining reward.
The halving, most recently implemented in April 2024, is a programmed event that halves bitcoin’s rate of expansion every 4 years. Starting today, 3,125 BTC are issued as rewards for each block mined on the Bitcoin network, down from the original 50 BTC at launch after four halving events to date.
Historically, bitcoin’s price has tended to peak around 16-18 months after a halving, followed by a bear market that typically lasts about a year.
BTC peaked last October, approximately 18 months after the April 2024 halving, meaning the cycle is playing out again. So the bear market may deepen in the short term.
Zheng said the cycle is proving very difficult to break. According to him, the reason is simple: human psychology.
“The ‘four-year crypto cycle’ momentum is strengthening and is extremely difficult to break due to the psychological behavior of individual investors,” Zheng said.
Individual investors tend to behave in a predictable manner – buying during hype and selling during panic. This behavior reinforces the four-year boom-and-bust pattern that has defined crypto markets for more than a decade.
Because of this, Zheng said bitcoin still trades more like a speculative asset than a safe haven like gold.
He added that institutional adoption of bitcoin remains very slow and limited in scope at this stage and warned that some firms that have bought bitcoin as a financial asset may be forced to sell, leading to a deeper price selloff.
“The total size of crypto ETFs and Digital Asset Treasury companies is only about 10% of the entire crypto market. Some Digital Asset Treasury companies may be forced to sell cryptos to meet certain debt service requirements during this bear market, which may create a vicious circle,” Zheng said.
For now, Zheng’s outlook is clear: crypto’s bear market may have further to run before the next cycle begins.
