Is Bitcoin at Risk Again?: The Four-Year Cycle and the Threat of an Additional Decline

Bitcoin is currently trading around $70,660, with a positive movement of 4.01% in the last 24 hours. However, this short-term recovery masks a deeper reality: the cryptocurrency with the largest market cap is in what industry experts consider a critical bearish market phase, with potential for even more severe corrections in the coming months.

CK Zheng, founder of the investment firm ZX Squared Capital, has expressed concern about Bitcoin’s immediate future. According to his analysis, the price could decline by an additional 30% during 2026, continuing a pattern that has characterized crypto markets for over a decade. This prediction is not baseless alarmism but the result of observing a well-documented phenomenon: Bitcoin’s four-year cycle.

The Repeating Pattern: Understanding the Quadrennial Cycle

Bitcoin’s four-year cyclical dynamics are one of the most fascinating (and frustrating) phenomena in the crypto ecosystem. This pattern centers on a specific technical event: the halving of mining rewards. The most recent halving occurred in April 2024, reducing miners’ rewards from 6.25 BTC to 3.125 BTC per block.

What makes this cycle predictable is its historical alignment with price behavior. Typically, Bitcoin reaches its peak about 16 to 18 months after a halving. The October 2024 peak, surpassing $126,000, occurred almost exactly within the expected timeframe (18 months after April 2024). After these peaks, a correction phase usually ensues, lasting around a year.

What worries investors like Zheng is that this cycle has proven highly resistant to structural changes. Despite increased institutional adoption and more sophisticated financial markets, the pattern persists. This suggests something deeper than mere technical dynamics: human behavior is the true driver behind these predictable oscillations.

Investor Psychology: The Invisible Anchor of the Cycle

Zheng identifies a critical factor explaining why the four-year cycle is nearly impossible to break: predictable psychological patterns among investors. Market participants tend to behave cyclically: buying during periods of speculative euphoria and selling during panic phases. Far from being anomalies, these behaviors become the forces that perpetuate the cycle.

When the euphoria of all-time highs dissolves, panic selling begins. Individual investors, who entered positions during the boom, seek exits as prices start to reverse. This is compounded by hedge funds and professional traders exploiting volatility. The result is a downward spiral that reinforces the bearish narrative.

This predictable human behavior keeps Bitcoin functioning more as a high-risk speculative asset than as a store of value. Unlike gold, which has historically served as a hedge against inflation and uncertainty, Bitcoin remains vulnerable to shifts in market sentiment.

Institutional Adoption: An Insufficient Buffer?

One argument used to suggest the cycle could be mitigated is increased institutional participation. The idea was that large financial entities stabilizing the market would smooth out extreme cycles. However, this hypothesis is still far from realization.

According to Zheng, cryptocurrency ETFs and Digital Asset Treasury programs from major companies account for only about 10% of the total crypto market. More problematic: during financial stress, some of these firms might be forced to liquidate positions to meet debt obligations. Far from stabilizing, limited institutional adoption could amplify corrections, creating a vicious cycle of selling.

In other words, the anticipated “market maturation” has not yet reached a point where it provides significant cushioning against extreme movements. Bitcoin remains a highly volatile asset where large-scale structures do not yet sufficiently dominate price dynamics.

What Does the Near Future Hold?

Market analysts suggest that Bitcoin’s next move will depend on external geopolitical factors. Specifically, the stability of oil prices and maritime traffic through the Strait of Hormuz could be decisive. If these indicators stabilize, Bitcoin might attempt to retest resistance levels between $74,000 and $76,000. Conversely, if geopolitical uncertainty intensifies, prices could be dragged down to mid-$60,000 levels.

This dynamic reflects how Bitcoin, despite its decentralized nature, remains sensitive to macroeconomic trends and specific geopolitical events. The recent move above $70,000, triggered by a five-day pause announced by U.S. President Trump in attacks on Iranian energy infrastructure, illustrates this vulnerability.

Altcoins, including Ethereum, Solana, and Dogecoin, reflected this recovery with gains of about 5%, while crypto-related mining stocks rose along with broader stock indices (S&P 500 and Nasdaq, with gains near 1.2%).

Final Reflection: How Long Will the Cycle Persist?

The central question facing the crypto community is whether the four-year cycle is a permanent feature of Bitcoin or a transient phase that will fade as the asset matures. For now, evidence suggests that as long as individual investors remain the dominant market force and institutional adoption stays modest, the cyclical pattern will continue.

For Bitcoin investors, this means recognizing that extreme volatility is an inherent characteristic, not a temporary anomaly. Future corrections, though potentially challenging, could present opportunities for strategic repositioning rather than investment tragedies. The four-year cycle, as predictable as it is, remains the current reality of the cryptocurrency market.