The most recent analysis of the Bitcoin USD chart reveals a troubling trend, as it is poised to close the fourth consecutive week with negative performance due to significant outflows. Market participants are left pondering how much further BTC might decline.
Notably, analysts have identified a recurring pattern in Bitcoin”s price movements over the years, which may provide insight into its future trajectory. Historically, the periods of bullish and bearish cycles have been remarkably consistent. For instance, the bull cycle from 2015 to 2017 spanned approximately 1,050 days, followed by a bear market that lasted about 364 days. Similarly, the subsequent bull phase lasted around 1,071 days from the lows of 2018 until 2021, after which another 364-day bear market ensued.
The current bullish cycle, initiated in September 2022, is estimated to last about 1,064 days, leading to speculation that the ongoing bearish phase could extend until September 2026 if historical trends hold true.
In addition to these historical patterns, external factors are also at play. The situation in the Japanese bond market serves as a critical indicator. The rising yields on Japan”s 2-year and 10-year government bonds signal increasing borrowing costs for the Japanese Yen. This development suggests an unwinding of the Yen carry trade, prompting investors to move away from riskier assets, including Bitcoin.
As borrowing costs in Japan increase, the value of the Yen is also affected, which in turn is likely to exert additional pressure on risk-on assets like Bitcoin. This liquidity outflow could amplify Bitcoin”s current downtrend, particularly as large market participants, or “whales,” appear to be contributing to the liquidity drain rather than taking advantage of lower prices.
The price of Bitcoin is currently hovering just above $83,900, approximately 10% away from a critical support level at $74,000, which represents its lowest price point in the past year. Should the downward trend continue, analysts warn that Bitcoin could potentially decline to around $50,000—a level few investors anticipated, yet increasingly plausible given the current market dynamics.
Some industry leaders, such as the CEO of Strategy, view further declines as an opportunity, aiming to acquire more Bitcoin at discounted rates. This strategy underscores the belief that long-term holders may benefit from lower average costs if Bitcoin continues its downward trajectory.
