Viewpoint: Bitcoin's decline raises concerns about a four-year cycle, but a deep bear market may be hard to replicate

According to The Block, research institution K33 analysis points out that despite Bitcoin's decline of about 40% from last year's peak, raising concerns about a repeat of the past four-year cycle downturn, several structural factors make it unlikely for the market to experience a deep bear market similar to the 80% declines seen in 2018 or 2022.

The report believes that the key difference in the current environment compared to previous cycles is the increased institutional adoption, continuous inflows into regulated products (such as spot ETFs), and a loose interest rate environment. More importantly, there has not been a forced deleveraging event that triggered a systemic market collapse like GBTC, Luna, or FTX.

On the technical side, analysts view approximately $74,000 as the current key support level. If this level is breached, the downside risk may intensify, with targets potentially pointing to $69,000 or even $58,000 (near the 200-week moving average). Meanwhile, some common bottoming signals are beginning to emerge: Bitcoin recorded a high spot trading volume of over $8 billion on February 2, while the derivatives market's open interest and funding rates have also entered extreme negative territory. These signals, combined with prices still above support levels, may indicate that the market is attempting to form a bottom.