Analysts Say Bitcoin Bear Market Driven by Four-Year Cycle, Inflation, and Leverage Liquidation, Could Rebound to $100,000 by Year-End

Bitcoin is currently in a bear market, and several analysts believe that the four-year cycle, inflationary pressures, and market leverage liquidation are the three main reasons for Bitcoin's continued slump. Some analysts predict that as the interest rate environment improves, Bitcoin could rebound to $100,000 by the end of the year. Bitwise Chief Investment Officer Matt Hougan stated that the four-year cycle affects investor psychology, noting that historically, Bitcoin typically experiences three years of gains followed by one year of decline. Grayscale's research director Zach Pandl pointed out that this round of decline is primarily driven by macroeconomic factors, with U.S. inflation rising to 4.1% year-on-year in June, exceeding the Federal Reserve's 2% target, leading to market expectations of potential interest rate hikes. Market leverage is also a significant factor in Bitcoin's decline; Hougan and CryptoQuant's research director Julio Moreno indicated that during bull markets, investors increase leverage, which gets liquidated when the market weakens. Pandl expects Bitcoin to potentially hit a bottom of $58,000 in the short term, with the market still influenced by potential rate hikes and developments in U.S. cryptocurrency legislation. 21Shares Chief Investment Strategist Adrian Fritz anticipates that Bitcoin will bottom out in the summer and rebound to $100,000 by year-end, driven by expectations of future rate cuts and the conclusion of the Iran war.

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