ZX Squared Capital Founder Warns: Bitcoin May Be in the Deepest Stage of the Bear Market, Could Drop Another 30% in the Future

American crypto investment firm ZX Squared Capital founder CK Zheng recently warned that Bitcoin may have entered the deepest phase of this cycle’s bear market, and further declines could still occur in the future.
(Background: Trump states: Iran will only cease fire if they “unconditionally surrender”! Middle East conflict escalates, oil and the dollar soar, Bitcoin drops to $68,000)
(Additional context: Bitcoin at $72,000 has stalled? Funding rates have been negative for two weeks, open interest is only $20.8 billion—“no fuel” for a rally)

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• Bitcoin may have entered the deep water of the bear market
• The four-year cycle once again dominates the market
• Investor psychology reinforces market volatility
• Institutional funds still insufficient to change the structure

Recently, the cryptocurrency market has experienced increased volatility, and discussions about Bitcoin’s future trend have heated up again. In response, CK Zheng, founder of American crypto investment firm ZX Squared Capital, recently stated that Bitcoin is currently “clearly in the deepest phase of the bear market,” and the downward trend may not be over, potentially further declining into 2026.

He pointed out that if historical patterns continue to hold, Bitcoin could face greater price pressure during this cycle.

Bitcoin may have entered the deep water of the bear market

According to market data, Bitcoin reached a historic high of over $126,000 in October last year, but has since declined significantly, currently around $68,000—almost halving from its peak.

Zheng noted that this price movement indicates Bitcoin has entered the deep zone of the bear market. He predicts that, influenced by current macroeconomic conditions and market structure, Bitcoin could fall another approximately 30% by 2026.

He also mentioned that recent geopolitical tensions, such as the instability in the Middle East, could impact market sentiment and further intensify volatility in the crypto market.

The four-year cycle once again dominates the market

In the crypto market, the “four-year cycle” has long been regarded as a key pattern influencing prices. This cycle typically revolves around Bitcoin’s halving events, which usually lead to a price increase after the halving, followed by a correction and bear market. The most recent halving occurred in April 2024, reducing the mining reward per block to 3.125 Bitcoin.

Historical experience shows that Bitcoin often peaks about 16 to 18 months after halving, then enters roughly a year of bear market correction. Since the high point in this cycle occurred about 18 months after the halving, Zheng believes the market is once again following this historical cycle.

Investor psychology reinforces market volatility

Zheng believes that the difficulty in breaking the four-year cycle mainly stems from investor psychology.

He explained that retail investors tend to chase gains during bullish periods but panic-sell during downturns. This “buy high, sell low” behavior repeatedly reinforces the cyclical volatility inherent in the crypto market.

Therefore, at this stage, Bitcoin remains more akin to a highly volatile speculative asset rather than a safe haven like gold.

Institutional funds still insufficient to change the structure

Although institutional capital has gradually entered the crypto market in recent years, Zheng pointed out that its overall scale is still insufficient to alter the market structure.

He stated that currently, crypto ETFs and companies holding Bitcoin as corporate reserves account for only about 10% of the entire crypto market. If the market continues to decline, some companies holding Bitcoin may be forced to sell assets due to debt or financial pressures, further increasing selling pressure.

If this occurs, it could create a vicious cycle of “price decline—forced selling—further price drops.”

Overall, Zheng believes that the crypto market is still in a cycle adjustment phase. Before the next upward cycle begins, the market may need to go through a period of volatility and correction.

With macroeconomic conditions, geopolitical risks, and market capital structure changing, Bitcoin’s future remains highly uncertain. For investors, managing risk amid cyclical fluctuations will be a key challenge in the coming period.