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- Bitcoin has remained volatile, recovering from its early February low to $70,000 before falling back down under that mark.
- Market watchers said bitcoin is showing signs that its historical four-year cycle around halving remains intact.
- Steven McClurg, CEO of Canary Capital, told CNBC he expects bitcoin to fall as low as $50,000 in the summer.
Bitcoin’s short-lived bounce faded on Wednesday as the volatility in the world’s largest cryptocurrency continued.
Bitcoin was trading at around $66,166 at 10:21 a.m. ET on Wednesday, down roughly 4% on the day.
The digital coin has been on a downward trajectory since hitting an all-time high above $126,000 in October with the sell-off intensifying over the last month. Bitcoin dropped below $70,000 on Feb. 5 and slid to hold just above $60,000, which is seen as a key level.
Bitcoin then recovered from those lows and was back above $70,000, but has struggled to push higher from that, remaining in the range of $66,000 and $72,000.
On Thursday, bitcoin was around 47% lower than its record high.
Several factors have weighed on crypto markets, including volatility in technology stocks in the U.S., with which crypto assets often move in tandem with.
Meanwhile, the Feb. 5 sell-off was triggered by a wave of liquidations — when traders are forced to close positions if the price of bitcoin hits a certain point. This has a cascading effect, which can exacerbate selling. Those liqudiations have since slowed down.
Investors are also considering whether there will be a shift in U.S. monetary policy following U.S. President Donald Trump’s nomination of Kevin Warsh for Fed chair late last month.
Selling from issuers of bitcoin exchange-traded funds, or ETFs, which are large holders of the digital coin, led to outflows from these ETFs. That added to the pressure on the digital coin. However, in the last three days, bitcoin ETFs have recorded net inflows.
Bitcoin cycle back in focus
Market participants are looking at whether bitcoin’s typical cycle is intact. This refers to the historical pattern after an event known as halving, which often leads to new all-time highs for the cryptocurrency and a subsequent crash before new highs.
Bitcoin’s halving — an event written into its code that happens every four years —reduces the rewards given to bitcoin miners and effectively slows down the supply of bitcoin on the market. The supply squeeze typically precedes rallies to fresh record highs for bitcoin. The most recent halving took place in April 2024.
There has been a debate as to whether the typical bitcoin cycle is over or if the patterns are breaking. But investors and analysts suggest the cycle is very much intact.
“2026 I expect to be a bear leg to the four-year cycle,” Steven McClurg, CEO of Canary Capital, told CNBC on Wednesday. “We have experienced several four-year cycles since bitcoin has launched and this is no different than any other.”
McClurg added that he expects bitcoin to fall to as low as $50,000 in the summer before “things turn around in the fall.”
Markus Thielen of 10X Research told CNBC last week that bitcoin could fall to the $50,000 level.