Bitcoin’s Bear Market Deepens: Is the Four-Year Cycle to Blame?
Bitcoin (BTC) is currently experiencing a significant downturn, with experts predicting further declines. According to CK Zheng, founder of crypto investment firm ZX Squared Capital, the leading cryptocurrency is “convincingly in deep bear market territory now” and could fall another 30% in 2026.
The Weight of the Four-Year Cycle
Zheng attributes this potential drop to the well-known “four-year cycle” observed in Bitcoin’s price history. This cycle, centered around the quadrennial mining reward halving, has seen periods of surging prices followed by crashes and subsequent recoveries.
The most recent halving occurred in April 2024, reducing the reward for mining fresh blocks from 50 BTC to 3.125 BTC. Historically, Bitcoin’s price tends to peak roughly 16-18 months after a halving, followed by a bear market lasting approximately a year. Given that Bitcoin reached a record high in October 2024, around 18 months after the April 2024 halving, the cycle appears to be repeating.
Zheng believes this cycle is difficult to break, citing “human psychology” as a key factor. Individual investors often exhibit predictable behavior, buying during periods of hype and selling during panic, which reinforces the boom-and-bust pattern.
Bitcoin: Speculative Asset or Safe Haven?
Because of this cyclical behavior, Zheng argues that Bitcoin currently trades more like a speculative asset than a safe haven asset like gold. The slow pace of institutional adoption further contributes to this assessment.
The total size of crypto ETFs and Digital Asset Treasury companies currently represents only around 10% of the entire crypto market. This limited institutional involvement means that firms holding Bitcoin as a treasury asset may be forced to sell during the bear market to meet debt obligations, potentially exacerbating the price decline.
Recent Price Action and Market Sentiment
As of March 7, 2026, Bitcoin is trading around $67,690.58, a significant drop from its peak of over $126,000 in October of the previous year. The cryptocurrency recently slipped below $68,000 heading into the weekend, coinciding with the dollar’s steepest weekly gain in a year.
Short-term Bitcoin holders have recently sent $1.8 billion in BTC to exchanges following the $74,000 rally, potentially indicating a move to capitalize on gains or a fear of further declines.
FAQ
Q: What is the Bitcoin halving?
A: The halving is a programmed event that reduces the reward for mining new Bitcoin blocks by half every four years, decreasing the rate at which new Bitcoins are created.
Q: What is the four-year cycle?
A: It’s a recurring pattern in Bitcoin’s price history characterized by periods of growth, a peak, a bear market, and then recovery, generally linked to the halving events.
Q: Is Bitcoin a safe haven asset?
A: Currently, according to CK Zheng, Bitcoin behaves more like a speculative asset due to its cyclical price movements and limited institutional adoption.
Q: Could Bitcoin fall another 30%?
A: According to ZX Squared Capital’s founder, a further 30% price drop is expected during 2026.
Did you know? The first Bitcoin halving occurred in November 2012, reducing the block reward from 50 BTC to 25 BTC.
Pro Tip: Understanding the historical cycles of Bitcoin can help investors make more informed decisions, but it’s crucial to remember that past performance is not indicative of future results.
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