Bitcoin, Is a Bear Cycle Beginning?...Warning Signs of a $40,000 Drop

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An analysis suggests that Bitcoin (BTC) has fallen approximately 42% from its all-time high, indicating that the market has entered a ‘typical cycle adjustment phase.’

Crypto media outlet NewsBTC recently reported in an analysis that Bitcoin is showing a similar trend to past cycles, having dropped about 42% from its peak. This correction is interpreted not as a mere sharp decline, but as part of a historically recurring pattern.

Bitcoin entered a downturn after reaching a peak of around $120,000 in 2025. The current price movement is evaluated as a typical consolidation phase, hovering within a long-term downtrend. Some analysts suggest that if this structure persists, further declines could follow, with certain models proposing approximately $40,000 as the cycle bottom.

Several complex factors are contributing to the market's decline. Profit-taking by long-term holders, excessive leverage liquidations in the derivatives market, and ETF outflows are simultaneously weakening demand, increasing downward price pressure. In particular, the cascading effect of forced liquidations is analyzed as having amplified the extent of the decline.

The macroeconomic environment has also played a role. As interest rate burdens and risk-aversion sentiment strengthen, both institutional and individual investors are reducing their market participation. Indeed, with large-scale liquidations and rapidly shrinking investor sentiment, fears of a 'crypto winter' are resurfacing.

However, there are also assessments that this correction is not an abnormal phenomenon. In the past, Bitcoin has experienced declines ranging from 70% to 80% in each cycle before setting new all-time highs. This 42% drop is relatively moderate compared to previous cycles, interpreted as a natural adjustment phase within a long-term upward trend.

The market views the current phase not as a short-term bearish trend but as a structural rebalancing stage. Investors are focusing less on the possibility of further declines and more on whether this correction will lead to the next upward cycle.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*