Bitcoin may face additional significant losses in the coming months, with analysts warning that the cryptocurrency could plunge to as low as $31,000 if the current downturn evolves into a full-scale bitcoin winter. Strategists at Ned Davis Research recently cautioned clients that historical patterns suggest the world’s largest cryptocurrency has further to fall, despite already tumbling 44% from its October peak. The analysis comes as bitcoin traded around $69,180 on Friday, meaning a drop to $31,000 would represent an additional 55% decline from current levels.
According to Pat Tschosik, NDR’s chief thematic strategist, and analyst Philippe Mouls, their examination of past bitcoin bear markets indicates potential for a 70%-75% peak-to-trough decline. The strategists noted that historical bitcoin winters dating back to 2011 have seen the cryptocurrency drop an average of 84%, with these prolonged downturns lasting approximately 225 days on average.
Historical Bitcoin Winter Patterns Show Severe Declines
The analysis from Ned Davis Research reveals that bitcoin has experienced multiple severe downturns throughout its history, each characterized by substantial price declines and extended durations. However, the current selloff has only lasted 129 days since bitcoin peaked in early October, suggesting that based on historical averages, there may be more time and additional losses ahead if this becomes a full bitcoin winter. The strategists emphasized that while the pattern is consistent, each cycle has shown unique characteristics.
Additionally, Tschosik and Mouls acknowledged that the cryptocurrency market has evolved significantly since earlier cycles. The presence of institutional investors and greater mainstream adoption could potentially provide more price stability than in previous downturns. “Notice the winters/major bears are getting slightly less severe over time in terms of percent decline and we think that will continue,” the strategists said of their price forecast.
Growing Concerns Among Market Analysts
Meanwhile, other market observers have issued similarly bearish predictions for bitcoin’s near-term trajectory. John Blank, chief strategist at Zacks Investment Research, recently speculated that the cryptocurrency could fall to approximately $40,000, citing the historical duration of crypto winters lasting over a year. This secondary forecast aligns with concerns that the current downturn may have substantial room to run.
In contrast to slightly more optimistic projections, Stifel released analysis last week predicting bitcoin could decline to around $38,000 before finding a bottom. These varying price targets reflect uncertainty among analysts about the ultimate depth of the current selloff, though most agree that additional downside remains probable based on historical precedent.
Institutional Participation May Limit Bitcoin Winter Severity
Despite the bearish outlook, some factors distinguish the current market environment from previous bitcoin winters. The cryptocurrency market now features significantly more institutional participation, including spot bitcoin exchange-traded funds and corporate treasury holdings. According to the NDR strategists, this increased institutional involvement could create greater price stability and potentially reduce the severity of declines compared to earlier cycles.
However, the fundamental pattern of severe corrections remains intact, even if the magnitude may be moderating over time. The strategists noted that while bitcoin winters appear to be getting “slightly less severe,” the potential for substantial losses still exists. This observation suggests that even with institutional support, bitcoin remains vulnerable to significant volatility during market downturns.
Market participants will be watching closely to see whether bitcoin can stabilize at current levels or if the cryptocurrency will follow historical patterns toward deeper losses. The coming weeks will be critical in determining whether this downturn remains a standard correction or escalates into a prolonged bitcoin winter, though analysts have not specified exact timeframes or catalysts that might reverse the current trend.
