Bitcoin Is Down 48% From Its All-Time High. Here's What History Says Happens Next
Key Points
Bitcoin is a highly cyclical asset, typically trading in four-year cycles of boom and bust.
In two previous market declines, Bitcoin lost 64% and 73% of its value, so a 48% decline is nothing new.
If history is any guide, Bitcoin could have further to fall in price before recovering in 2027.
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The first thing you need to know about Bitcoin (CRYPTO: BTC) is that it has a long track record of bouncing back from adversity. That's why Bitcoin's current 48% plunge from its all-time high of $126,000 doesn't worry me as much as it does some crypto investors.
In fact, if history is any guide, Bitcoin could be about to go on another of its record-setting runs as early as 2027. The historical evidence is just too overwhelming to ignore.
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Bitcoin's four-year cycle
Long-time crypto investors understand that Bitcoin is highly cyclical, typically trading in four-year cycles of boom and bust. There are typically three very good years, followed by a stomach-churning market crash in the fourth year.
Image source: Getty Images.
That's what appears to be happening right now. Bitcoin soared by 156% in 2023 and by another 121% in 2024. It then hit its all-time high of $126,000 in October 2025. Those are three very good years. So, unfortunately, 2026 is shaping up to be the "market crash" year for Bitcoin.
The same pattern occurred in the previous four-year cycle. Bitcoin soared in value in 2019 and 2020, and then hit a (then) all-time high of $69,000 in November 2021. That was followed up by a violent market crash in 2022, when Bitcoin lost 64% of its value.
Still not convinced? Let's look at one more four-year cycle. Bitcoin soared in value in 2015 and 2016, and hit a (then) all-time high near $20,000 in 2017. That was followed up (of course!) by a gut-wrenching market decline of 73% in 2018.
Of course, historical performance is no guarantee of future performance. There is no ironclad law of the universe that says Bitcoin is destined to repeat the same cycle, over and over again.
However, Bitcoin does have a high-profile halving event (in which the rate of production of new Bitcoin gets cut in half) every four years. This change to the coin supply appears to account for Bitcoin's cyclical four-year nature.
What will happen next for Bitcoin?
Most likely, things get worse before they get better. Bitcoin, currently trading around $65,000, could easily dip below $50,000 before this year is over. After all, Bitcoin is "only" down 48% from its all-time high. The previous two market crashes have seen Bitcoin lose 64% and 73% of its value, respectively.
However, things should start to turn around for Bitcoin in 2027. By the time of the next halving, currently slated for April 2028, it should be all systems go for Bitcoin once again. That's why I'm buying Bitcoin now, at deeply discounted levels. History may not repeat itself, as Mark Twain famously observed, but it often rhymes.
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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
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