Fresh fears have hit the cryptocurrency market after analysts at Wolfe Research warned Bitcoin may still face a deeper correction – with prices potentially sliding towards $30,000 if past market cycles repeat. The world’s largest digital asset has already suffered a sharp drop in recent months.
At its lows earlier this month, Bitcoin was down more than 50% from the record high of about $126,000 reached late last year. Although the cryptocurrency has since staged a modest recovery, experts say investors should not assume the worst is over. According to research firm Wolfe Research, Bitcoin’s current fall is still relatively mild compared with previous downturns. Analyst Rob Ginsberg said historical patterns show each four-year Bitcoin bear market has seen an average 75% peak-to-trough decline. He explained that the market only briefly reached a 50% drop before rebounding, adding that if history repeats the price could fall much further.
Ginsberg wrote: “What does signal danger is the average drawdown of each cycle. We briefly reached 50% before bouncing, but should history repeat, 75% would imply we get close to $30,000.”
Bitcoin tumbled to a 16-month low of $60,062 on February 5 before rebounding around 15% the following day to roughly $72,000. However, that recovery quickly lost momentum.
The cryptocurrency has since traded mostly between $66,000 and $72,000, last sitting near $68,000 – about 7% higher over the past five days but still well below its peak.
Wolfe Research said the same pressures that drove the sell-off remain in place and are unlikely to ease soon.
The firm pointed to ongoing economic uncertainty, geopolitical tensions and weak sentiment towards higher-risk investments, all of which have continued to weigh on cryptocurrencies and equities.
Analysts also noted that attempts in the United States to introduce a clearer legislative framework for digital assets have faced political resistance, raising doubts that any major crypto market structure law will pass this year.
Ginsberg added there are currently no significant macroeconomic, sentiment or legislative changes expected in the near future that would quickly reverse the trend.
Researchers said that while prices have stabilised for now, it would be difficult to conclude the market has reached a definitive bottom, warning further volatility is likely.
If previous cycles repeat, analysts believe Bitcoin could still face a deeper correction – potentially pulling the price back towards the $30,000 level.