"While many are still focused on how high the bitcoin price could go during this current bull market (although given current price action, maybe not!), it's equally important to prepare for what comes next. Here we'll look at the data and mathematics that can help us estimate where Bitcoin's next bear market low could occur - not as a prediction, but as a framework based on prior cycles, on-chain valuation metrics, and even the fundamental valuations of BTC."
"This repeatability gives us a powerful anchor for estimating potential downside when combined with the trend of diminishing drawdowns. While Bitcoin's earliest cycles saw declines as deep as 88%, that figure has been steadily compressing, to 80% in 2018 and 75% in 2022. Projecting that same trend forward, a continuation of diminishing volatility would imply that the next bear market could bring a ~70% retracement from cycle highs."
The Bitcoin Cycle Master chart collates on-chain metrics to create valuation bands that historically pinpointed macro bottoms at $160 (2015), $3,200 (2018), and $15,500 (2022). The Cycle Lows band currently sits near $43,000 and rises daily, providing a baseline for potential declines. The raw MVRV Ratio measures market price versus realized price and historically falls to about 0.75x in deep bear markets, implying market price trades roughly 25% below aggregate cost basis. Historical drawdowns compressed from 88% to 80% in 2018 and 75% in 2022. Continuing this trend suggests a possible ~70% retracement from cycle highs.
Read at Bitcoin Magazine
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