Wave Analysis: Third Downtrend May Be the Final One
Yi Lihua, founder of Liquid Capital, recently shared his market assessment, stating that Bitcoin’s current decline is the third wave following the October 11 high. According to wave theory and cyclical patterns, this could be the last major sell-off before a trend reversal. He pointed out that bear market tails historically witness panic selling and deleveraging, but no obvious black-swan or blow-up events have occurred yet, warranting continued vigilance.
Key Drivers: U.S. Equities, Strategy, and Fed Policy
Yi identified the U.S. stock market’s overall trend and the performance of Strategy (formerly MicroStrategy) as primary external catalysts for this downturn. The market must closely monitor the Fed’s response to upcoming CPI data. If inflation remains stubborn, it could alter rate-cut or hike expectations, triggering a sustained correction in equities and dragging down crypto assets. These macro factors collectively exert downward pressure on Bitcoin.
Bottom Projection and Accumulation Window
From Bitcoin’s all-time high of $126,000, Yi outlined two extreme scenarios: a 60% decline would bring the price to approximately $51,000, while a 66% decline would target around $43,000. He believes that regardless of the exact bottom, July and August of 2026 are likely to constitute the final bottom zone of this cycle and the most attractive accumulation window for the coming three years. He also cautioned that black-swan events often emerge in late bear markets, advising investors to maintain flexible position management to mitigate potential risks.