Bitcoin, start of a downtrend cycle?...Warning sign of a fall to $40,000

▲ Bitcoin

Bitcoin (BTC) has fallen by approximately 42% from its all-time high, leading to an analysis that the market has entered a 'typical cycle correction phase.'

Crypto media outlet NewsBTC reported in a recent analysis that Bitcoin is showing a similar trend to past cycles, having fallen by about 42% from its peak. This correction is interpreted not as a simple crash but as part of a historically repeating pattern.

Bitcoin transitioned to a downtrend 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 is maintained, further declines could follow, with certain models indicating approximately $40,000 as the cycle bottom.

The market decline is driven by complex factors. Weakened demand, including profit-taking by long-term holders, liquidation of excessive leverage in the derivatives market, and ETF outflows, occurred simultaneously, increasing downward price pressure. It is analyzed that the scale of the decline expanded particularly due to a cascade of forced liquidations.

The macro environment also played a role. As interest rate burdens and risk aversion sentiments strengthened, both institutional and individual investors reduced their market participation. Indeed, with large-scale liquidations, investor sentiment rapidly contracted, and concerns about 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 of 70% to 80% in each cycle before reaching new all-time highs. This 42% decline is, in fact, milder compared to previous cycles and is interpreted as a natural correction phase within a long-term upward trend.

The market views the current phase not as a short-term bearish trend but as a structural readjustment stage. Investors' attention is focused 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. The content should be interpreted for informational purposes only.*