Crypto Market Faces Potential Bitcoin Downturn - Expert Predicts Bear Phase Lasting Through 2026

The crypto sector may be entering a significant downturn that could extend through mid to late 2026, according to CK Zheng, founder of ZX Squared Capital. His analysis suggests Bitcoin could experience an additional 30% decline from current levels, driven by a combination of geopolitical pressures and established market cycles. Current BTC trading at $69.91K with a 24-hour decline of 4.12%, this perspective warrants closer examination of the underlying factors.

The Four-Year Cycle Pattern and Current Market Position

Zheng’s thesis relies heavily on Bitcoin’s historical behavior within the broader crypto market’s four-year cycle. Historically, Bitcoin typically peaks 16 to 18 months following a halving event, after which the market experiences roughly 12 months of contraction. The current price action aligns with this documented pattern, suggesting the market may be transitioning from peak euphoria into the predicted decline phase. This cyclical behavior has repeated across multiple iterations, providing a measurable framework for understanding current conditions.

Institutional Adoption Remains a Critical Vulnerability

Despite years of mainstream acceptance efforts, institutional participation in crypto remains surprisingly limited. Current analysis indicates that ETF products and corporate treasuries represent only approximately 10% of the total market capitalization. This relatively low institutional penetration creates a significant risk factor—should major corporations begin liquidating their holdings or if institutional investors retreat due to negative sentiment, it could trigger a substantial reversal. The concentration of retail participants makes the crypto market particularly susceptible to rapid panic selling.

Cascade Risks: What Could Trigger Deeper Losses

The combination of thin institutional support and substantial retail exposure creates vulnerability to cascading liquidations. A sudden shift in market psychology—whether driven by corporate asset sales or deteriorating retail confidence—could initiate forced selling waves that accelerate losses well beyond the predicted 30% threshold. This scenario would compound downward pressure from both macro geopolitical factors and the natural market cycle dynamics already in motion.