Bitcoin BTC$68,025.16 is firmly in the deepest phase of the bear market and the pain may worsen, according to CK Zheng, founder of crypto investment firm ZX Squared Capital.

"Bitcoin's price is convincingly in deep bear market territory now. We expect a further 30% price drop during 2026 as the Iran war started," Zheng told CoinDesk in an email, citing the "four-year cycle" as one of the key catalysts.

The world's largest cryptocurrency has already nearly halved since hitting a record high of over $126,000 in October last year, according to CoinDesk data. As of writing, it changed hands at around $68,000.

The four-year bitcoin cycle

Crypto investors often talk about the "four-year cycle" – a pattern in which prices surge, crash, and then recover, centred on the quadrennial mining reward halving.

The halving, most recently implemented in April 2024, is a programmed event that halves bitcoin's supply expansion rate every 4 years. As of today, 3.125 BTC are emitted as rewards for each block mined on the Bitcoin network, down from the original 50 BTC at launch after four halving events to date.

Historically, bitcoin's price has tended to peak about 16–18 months after a halving, followed by a bear market that typically lasts about a year.

BTC topping out in October last year, roughly 18 months after the April 2024 halving, means the cycle is playing out again. So, the bear market could deepen in the near term.

Zheng said that the cycle is proving very difficult to break. According to him, the reason is simple: human psychology.

"The "Four-year crypto cycle" momentum is gaining strength and is extremely difficult to break due to individual investors' psychological behaviors," Zheng said.

Individual investors tend to behave in predictable ways — buying during hype and selling during panic. That behavior reinforces the boom-and-bust four-year pattern that has defined crypto markets for more than a decade.

Because of this, Zheng said bitcoin still trades more like a speculative asset than a safe haven like gold.

He added that the institutional adoption of bitcoin remains very slow and limited in scope at this stage and warned that some firms that have purchased bitcoin as a treasury asset may be forced to sell, leading to a deeper price sell-off.

"The total size of crypto ETFs and Digital Asset Treasury companies is only around 10% of the whole crypto market. Some Digital Asset Treasury firms may be forced to sell cryptos to meet certain debt servicing requirements during this bear market, which may create a vicious cycle," Zheng said.

For now, Zheng's outlook is clear: crypto's bear market may have further to run before the next cycle begins.