Bitcoin Price May Have Hit a 16-Year Cyclical Peak as Market Dives into Bear Territory

Bitcoin’s price has declined significantly in early 2026, with recent movements indicating a bear market in full force. After peaking in October 2025, the cryptocurrency has continued its downward trajectory, closing January 2026 below $80,000. Analysts attribute the move to bearish technical divergence and cyclical patterns that align with previous four-year cycles.

The decline has not occurred in isolation. A significant event in early February 2026, where a South Korean crypto exchange accidentally distributed $44 billion in Bitcoin to users, exacerbated the sell-off. Bithumb recovered 99.7% of the distributed coins but the incident highlighted systemic vulnerabilities and regulatory concerns.

Meanwhile, prediction markets like Polymarket have seen increased bearish sentiment, with the probability of Bitcoin dropping below $65,000 in 2026 now at 72%. This shift underscores growing pessimism about the asset’s near-term prospects.

Why Did This Happen?

Technical indicators have been critical in confirming the bearish shift. A bearish divergence in Bitcoin’s monthly chart—where price made a higher high while momentum indicators like RSI and MACD showed weaker readings—provided early signals. This pattern has historically marked the beginning of a bear market.

Bitcoin’s cyclical behavior has followed a consistent pattern of roughly 1,050 days between price bottoms and peaks. The October 2025 peak was itself a 1,050-day high from the 2022 bottom, suggesting that the current decline is in line with prior cycles.

The bearish momentum is further reinforced by Bitcoin’s break below its True Market Mean, a historical gravity point for price transitions. This level has often preceded extended drawdowns or consolidation periods in previous cycles.

How Did Markets React?

The broader crypto market has experienced a staggering $2 trillion loss in value since its peak in October 2025, with Bitcoin alone falling nearly 30% from its high. Ether, the second-largest cryptocurrency by market cap, has also dropped over 35% year-to-date. Liquidations have surged, with over $5 billion in leveraged positions being closed in just five days.

The selloff has impacted more than just cryptocurrencies. Shares of companies holding Bitcoin have also dropped, signaling a broad market re-rating of digital asset exposure. ETF outflows have continued, with U.S. spot Bitcoin ETFs losing billions in net outflows since late 2025.

What Are Analysts Watching Next?

Analysts are closely monitoring Bitcoin’s behavior below key levels. A weekly close below the $70,000 to $72,000 range could confirm a deeper correction. This would potentially push the asset toward the 0.382 Fibonacci retracement level near $57,842.

The broader macroeconomic environment adds to the uncertainty. The nomination of Kevin Warsh as the next Federal Reserve Chair has raised expectations of a tighter monetary policy and a shrinking balance sheet. These conditions are historically unfavorable for speculative assets like Bitcoin.

Institutional behavior and liquidity dynamics are also under scrutiny. The loss of ETF support and thinning liquidity have amplified volatility. If Bitcoin continues to trade below its realized price, it may signal that seasoned holders are also capitulating, increasing the likelihood of a prolonged bear phase.

The coming months will likely determine whether 2026 remains a bear market year or marks the start of a longer-term correction. For now, the focus remains on Bitcoin’s ability to reclaim key technical levels and whether the market can stabilize before further downside becomes inevitable.