- Bitcoin rallies have shown smaller returns over time, a trend described as “exponential decay.”
- The latest price structure indicates a break in the parabolic trend, which could signal a deeper correction.
- Historical cycles show Bitcoin’s declines becoming less severe, with the largest drop at 94% and the most recent at 77%.
- Based on previous cycles, a potential price floor as low as $25,000 has been suggested if the correction continues.
Peter Brandt, a veteran trader, issued a warning on Sunday about Bitcoin’s current price trend. According to a post on X, Brandt observed that Bitcoin is exhibiting “exponential decay”—a pattern where each upward cycle delivers smaller percentage gains as the asset matures.
Despite cycles that still see rapid upward movements, Bitcoin’s most recent rally has reportedly broken its usual parabolic trend. Brandt stated this break could mean the beginning of a more substantial correction for the cryptocurrency. Recent trading saw Bitcoin at approximately $89,784, while market sentiment remained bearish with reduced discussion volume in the last 24 hours.
Brandt referenced previous cycles as a guide. For instance, after peaking near $32 in 2011, Bitcoin fell to $2, a drop of 94%. In the 2013-2015 cycle, the price fell from about $1,150 to $150, an 87% decrease. During the 2018 downturn, the asset declined from $19,800 to $3,200, marking an 84% fall. Most recently, Bitcoin peaked at $69,000 in November 2021 and fell to $15,500 by November 2022, a 77% drop.
Brandt explained that if the present cycle mimics these declines, Bitcoin could potentially see a drop of up to 80% from its most recent high of about $126,000 reached in early October. That would bring Bitcoin’s value down to around $25,240—roughly 20% of its peak—based on his historical analysis.
Brandt’s assessment comes as he emphasized that previous breaks in parabolic trends have also resulted in significant drops that were less severe with each cycle. He presented this outlook as an observation grounded in Bitcoin’s price history, not as a direct forecast.
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