ZX Squared Capital Anticipates Major Bitcoin Correction by 2026

ZX Squared Capital analysts believe that the cryptocurrency market is currently experiencing a deep bearish phase. According to CK Zheng, founder of the renowned hedge fund, Bitcoin could see a correction of nearly 30% in the coming months. This forecast aligns with a well-documented cyclical pattern, where the four years following each halving of mining rewards play a central role in price dynamics.

The Four-Year Cycle: Data-Confirmed Trajectory

The four-year cycle model, established since the April 2024 halving, is faithfully repeating. Bitcoin reached an all-time high exceeding $126,000 in October 2025, about 18 months after this major reduction. The price is currently at $71,020, marking a significant decline from its peak. This correction represents approximately a 44% contraction from the recorded high, confirming the hypothesis of a structural bearish phase inherent to the four-year cycle.

Investor Behavior Amplifies Downward Pressure

Market participants’ psychological dynamics play an amplifying role in this downturn. Retail investors tend to behave procyclically: accumulating during euphoric phases and panicked selling during corrections. This collective panic mechanism mechanically reinforces the downward trend and accelerates price declines. ZX Squared Capital emphasizes that this behavioral dynamic is a major driver of the observed volatility.

Limited Institutional Adoption Worsens Systemic Fragility

A key structural factor remains the low level of institutional adoption within the crypto ecosystem. Cryptocurrency ETFs and companies using digital assets as strategic reserves account for only about 10% of the overall market. This insufficient penetration by institutional players means that some companies holding Bitcoin as a reserve asset could be forced to liquidate their positions under repayment pressures. These forced sales are likely to exert additional selling pressure, further exacerbating downward movements.

ZX Squared Capital’s analysis suggests that the coming months will remain challenging for Bitcoin holders, with significant downside risks persisting until 2026. The market remains dependent on this proven cyclical dynamic.