Market enters deep bear phase: Why crypto crash could extend through 2026

ZX Squared Capital founder CK Zheng argues that the cryptocurrency market may be transitioning into a prolonged downturn that could persist until mid-2026 or beyond. According to his analysis, several structural factors could trigger a crypto crash that pushes Bitcoin down an additional 30% from current levels around $71.45K.

The Four-Year Cycle Theory

Zheng’s forecast aligns with historical patterns in Bitcoin’s price behavior. The digital asset typically experiences peak valuations 16-18 months following each network halving event. This pattern has repeated consistently across market cycles, establishing a predictable rhythm: steady appreciation in the post-halving phase, followed by approximately one year of decline. Understanding this four-year cycle provides critical context for current market weakness and helps explain why the downside risk remains significant.

Geopolitical Headwinds Compound Volatility

Beyond natural market cycles, external geopolitical tensions are adding pressure to already fragile sentiment. These macroeconomic forces have historically accelerated bear market phases and extended their duration. Combined with technical weakness, the convergence of internal market dynamics and external shocks creates conditions where a crypto crash becomes increasingly probable rather than a mere possibility.

Institutional Adoption Remains a Vulnerability

Current market data reveals that institutional participation—measured through ETF flows and corporate treasury holdings—accounts for only approximately 10% of total Bitcoin holdings. This relatively modest penetration creates a significant risk vector: should institutional investors begin liquidating positions or retail traders lose confidence, a cascade of forced selling could quickly deepen losses. When leveraged positions unwind simultaneously, margin calls accelerate the decline, creating self-reinforcing downward pressure across cryptocurrency markets.

The combination of cyclical timing, geopolitical uncertainty, and concentrated institutional exposure suggests that Bitcoin and the broader crypto crash scenario remains a legitimate possibility through the remainder of 2026.