Bitcoin is firmly 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 price is now convincingly in deep bear market territory. We expect another 30% price decline in 2026 as the war in Iran has begun,” Zheng told CoinDesk in an email, citing the “four-year cycle” as one of the main catalysts.
The world’s largest cryptocurrency has already fallen by almost half since hitting an all-time high of more than $126,000 in October last year, according to CoinDesk data. At the time of writing, it changed hands at around $68,000.
The four-year Bitcoin cycle
Crypto investors often talk about the “four-year cycle” – a pattern in which prices rise, crash, then recover, centered around the quadrennial mining reward halving.
The halving, last implemented in April 2024, is a scheduled event that halves the rate of expansion of Bitcoin’s supply every 4 years. As of 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, the price of bitcoin tends to peak around 16 to 18 months after a halving, followed by a bear market that typically lasts around a year.
BTC peaked in October last year, around 18 months after the April 2024 halving, meaning the cycle is happening again. The bear market could therefore intensify in the short term.
Zheng said the cycle is proving very difficult to break. According to him, the reason is simple: human psychology.
“The dynamic of the ‘four-year crypto cycle’ is strengthening and is extremely difficult to break due to the psychological behavior of individual investors,” Zheng said.
Individual investors tend to behave in predictable ways: buying in hype and selling in panic. This behavior reinforces the four-year boom and bust pattern that has defined crypto markets for over a decade.
For this reason, Zheng said bitcoin still trades more as 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 point and warned that some companies that purchased Bitcoin as a treasury asset may be forced to sell it, leading to a greater price sell-off.
“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 could create a vicious cycle,” Zheng said.
For now, Zheng’s outlook is clear: the crypto bear market may still have a ways to go before the next cycle begins.
