Bitcoin (BTC) soared to an unprecedented peak of $126,000 in early October, marking a historic high for the cryptocurrency. However, this surge was swiftly followed by one of the most significant crashes in crypto history on October 10th.
After this sharp decline, Bitcoin entered a downward trend and recently tested the crucial support level around $60,000.
While some market watchers are optimistic that $60,000 might represent a bottom for Bitcoin’s price action, others remain cautious. Several experts suggest that Bitcoin could still be entrenched in a bear market phase with potential further losses ahead.
According to analysts from Wolfe Research cited by CNBC, despite Bitcoin’s dramatic 50% drop from its peak, there remains room for additional downside movement.
The latest report from Wolfe Research posits that Bitcoin hit its cycle apex at $126,000 last month and has since transitioned into a bearish cycle.
Following its October high point, BTC plunged over 50%, reaching lows near $60K before attempting to rebound toward approximately $72K. Nevertheless, it struggled to sustain upward momentum during this recovery attempt.
Wolfe Research cautions investors that the downturn may not have concluded yet and highlights how Bitcoin appears to be adhering closely to its historical four-year market cycles.
The firm emphasizes that previous bear markets within these four-year cycles have averaged declines of about 75%. If history repeats itself here again, Bitcoin could potentially slide down toward the $30K range.
“Historically speaking, bear markets occurring every four years tend to produce average drops around 75%. Under such circumstances, $BTC might fall close to $30K.”
The analysts also pointed out ongoing macroeconomic challenges along with political uncertainties continue fueling selling pressure on cryptocurrencies. They do not foresee regulatory developments providing any immediate relief or positive catalyst for prices either.
Caution is advised as recent price rallies may prove short-lived amid persistent geopolitical tensions and economic instability impacting risk assets like Bitcoin negatively.
This content does not constitute financial advice or recommendations.