If a bear market started in Bitcoin today, how far would the BTC price fall? How long does the bear last?

Renowned cryptocurrency analyst Timothy Peterson shared a detailed hypothetical bear market scenario for Bitcoin, pointing to a potential decline triggered by macroeconomic factors.

In a recent post, Peterson analyzed the conditions that could lead to a downturn and made a prediction of Bitcoin's price trajectory.

Peterson argues that there is no fundamental reason preventing a bear market from occurring right now, saying that the market just needs a trigger. A key catalyst, according to Peterson, could be the Federal Reserve's decision not to cut interest rates this year, a view recently reiterated by Fed Chair Jerome Powell. However, he notes that markets are often locked into any negative event to justify a downturn, even if there is no real reason.

Peterson's analysis draws comparisons to past Nasdaq declines, particularly the 2022 bear market. Peterson estimates that if the market follows a similar trajectory, a monthly decline of about 2-3% could take 9 to 14 months. However, given that the market's floor price has risen over time, it suggests that the bottom could be reached in about seven months.

Based on this projection, Peterson predicts that the Nasdaq could see a decline of 17%, which would lower Bitcoin by about 33%, which would correspond to a price level of $57,000.

However, he points out that psychological market behavior often prevents assets from reaching projected lows. Drawing parallels with Bitcoin's decline in 2022, when many expected the price to drop to $12,000 but bottomed out at $16,000, it suggests that Bitcoin's true low could be closer to $71,000 instead of $57,000 due to early opportunistic buying.

Despite presenting this bearish scenario, Peterson is not convinced that such a downturn is imminent. He notes that the current market is not in a state of exuberant overvaluation and that a significant amount of capital continues to be allocated to cash and fixed-income assets. He also notes that investor sentiment is already extremely bearish and that the bull-bear spread is at its lowest level since the COVID crash and the 2008 financial crisis, which has historically been a strong buy signal rather than a sell signal.