Crypto Strategist Warns of 80% Bitcoin Correction in Next Bear Cycle

A prominent crypto strategist has issued a stark warning about the potential for a significant correction in the Bitcoin market during the next bear cycle. The analyst, who accurately predicted the 2022 Bitcoin bottom, anticipates that a major investor group could trigger a severe downturn, with Bitcoin prices potentially falling by up to 80%. This forecast is based on the selling pressure that could be exerted by a key cohort of Bitcoin adopters, which could lead to a brutal bear winter for the cryptocurrency.

The strategist, known by the pseudonym DonAlt, believes that Bitcoin treasury companies will be the source of tremendous selling pressure in the next bear market. These companies, both private and public, hold a significant amount of Bitcoin, with data showing that they collectively possess over 1,112,904 BTC, valued at more than $117.445 billion at the time of writing. DonAlt's prediction suggests that the next Bitcoin bear market could be as devastating as the one witnessed in 2018 when BTC collapsed from $20,000 to $3,000. According to DonAlt, "Whatever the top ends up being, 70-80% down from that would be my guess."

While DonAlt sees a crippling Bitcoin bear market once BTC tops out this cycle, he remains bullish on the crypto king for now. In a new strategy session, he says that a Bitcoin move below a key support level could trigger an over 11% correction from current levels. "If we set a new low below $101,000, I could easily see us wipe towards $95,000 if not $90,000 pretty quickly." At the time of writing, Bitcoin is trading for $105,438.

This warning highlights the vulnerability of Bitcoin to market dynamics driven by large-scale investors. Historically, bear markets in the crypto space have been characterized by strong uptrends in both yields and the U.S. dollar index, which could exacerbate the selling pressure. The analyst's warning underscores the importance of monitoring the actions of major Bitcoin holders, as their decisions can have a profound impact on the overall market sentiment and price movements.

The potential for an 80% correction in Bitcoin during the next bear market is a sobering reminder of the volatility and risks associated with investing in cryptocurrencies. While Bitcoin has shown resilience and growth in the past, the market remains susceptible to significant fluctuations driven by various factors, including geopolitical tensions and regulatory changes. Investors should be prepared for the possibility of substantial price corrections and consider diversifying their portfolios to mitigate risks.

The strategist's analysis also raises questions about the long-term sustainability of Bitcoin's adoption and its role as a macro asset. As more institutional investors and corporations enter the crypto market, the actions of these major players will continue to shape the trajectory of Bitcoin and other cryptocurrencies. The potential for a severe correction underscores the need for a cautious approach to investing in the crypto space, with a focus on risk management and diversification.

In conclusion, the warning from the crypto strategist serves as a timely reminder of the inherent risks and volatility in the Bitcoin market. As the next bear cycle approaches, investors should be prepared for the possibility of significant price corrections and consider the potential impact of major investor actions on the overall market. By staying informed and adopting a prudent investment strategy, investors can navigate the challenges of the crypto market and position themselves for long-term success.