If a Bear Market in Bitcoin Starts Today, How Far Would BTC Price Fall? How Long Will the Bear Market Last?

Renowned cryptocurrency analyst Timothy Peterson shared a detailed hypothetical bear market scenario for Bitcoin, hinting at a potential decline triggered by macroeconomic factors.

In a recent post, Peterson analyzed the conditions that could lead to a downturn and made a prediction regarding Bitcoin’s price trajectory.

Peterson argues that there is no fundamental reason preventing a bear market from occurring right now, and says the market just needs a trigger. A major catalyst, he says, could be the US Federal Reserve’s decision not to cut interest rates this year, a view recently echoed by Fed Chair Jerome Powell. However, he notes that markets often latch on to any negative event to justify a downturn, even if that’s not the real reason.

Peterson’s analysis draws comparisons to past Nasdaq declines, particularly the 2022 bear market. Peterson estimates that if the market follows a similar pattern, a monthly decline of around 2-3% could last between 9 and 14 months. However, given that the market’s bottom price has been rising over time, he suggests that the bottom could be reached in about seven months.

Based on this projection, Peterson estimates that the Nasdaq could see a 17% drop, which would push Bitcoin down by around 33%, corresponding to a price level of $57,000.

However, he notes that psychological market behavior often prevents assets from reaching projected lows. He suggests that Bitcoin’s true low could be closer to $71,000 rather than $57,000 due to early opportunistic buying, drawing parallels with Bitcoin’s 2022 decline, when many expected the price to drop to $12,000 but bottomed at $16,000.

Despite presenting this bearish scenario, Peterson is not convinced that such a downturn is imminent. He notes that the current market is not in a state of euphoric overvaluation and that significant capital continues to be allocated to cash and fixed-income assets. He also notes that investor sentiment is currently extremely bearish and that the bull-bear spread is at its lowest level since the COVID crash and the 2008 financial crisis, which has historically been a strong buy signal rather than a sell signal.

*This is not investment advice.