CK Zheng, founder of ZX Squared Capital, said Bitcoin may already be in the deepest phase of the current bear market cycle, and the decline may not be over. His view is that if historical patterns continue to hold, Bitcoin could fall another 30% in 2026.
From record high to a near 50% pullback
According to the market figures cited in the report, Bitcoin reached an all-time high of more than $126,000 in October last year before retreating sharply. It is now trading near $68,000, almost half of that peak. Zheng said this price action suggests Bitcoin has already moved into the deep end of a bear market.
He also pointed to the current macro backdrop and market structure as sources of pressure. Geopolitical tensions, including uncertainty tied to the Middle East, could weigh on sentiment and keep volatility elevated across crypto markets. The price behavior, in his view, still reflects a market under stress.
The four-year cycle remains central to his outlook
Zheng’s thesis is anchored in Bitcoin’s long-discussed four-year cycle, which is usually tied to the block reward halving. In past cycles, prices tended to rise after a halving event, then enter a correction phase and later a bear market.
The most recent halving took place in April 2024, bringing the block reward down to 3.125 BTC. Based on historical patterns, Bitcoin often reaches a cycle top roughly 16 to 18 months after a halving, followed by about a year of bear-market adjustment. Since this cycle’s high arrived around 18 months after the halving, Zheng argues that the market is once again following that historical rhythm.
Investor behavior and limited institutional scale
Zheng said the four-year cycle has been difficult to break largely because investor psychology has not changed. Retail traders often buy into strength when sentiment is hot, then sell into weakness when prices fall. That pattern of chasing rallies and cutting positions during declines keeps reinforcing crypto’s recurring cycles. On that basis, he said Bitcoin still trades more like a high-volatility speculative asset than a safe-haven asset such as gold.
He also argued that institutional participation has not yet reached a scale large enough to reshape the market. Crypto ETFs and companies holding Bitcoin as a treasury reserve together account for only about 10% of the overall crypto market, according to Zheng. If prices keep falling, some corporate holders could be forced to sell because of debt burdens or balance-sheet pressure, creating a chain reaction of lower prices, forced selling, and more downside.
His overall view is that the crypto market remains in a cyclical adjustment phase, with the path ahead still exposed to macroeconomic conditions, geopolitical risk, and shifts in capital structure.