Bitcoin Parabola Breakdown Raises Chance For 80% Correction:...
The Bitcoin parabola broke, leading some analysts to predict an 80% drawdown in BTC price. Will growing demand from traditional finance and strategic crypto reserves nullify all bearish predictions?
Bitcoin (BTC) price is under scrutiny again as veteran trader Peter Brandt is cautioning that BTC has violated its parabolic trendline, a technical feature that preceded deep drawdowns in previous bull markets. While the signal is bearish, the current market structure reflects a key difference from previous market cycles.
Peter Brandt said that Bitcoin has broken its current parabolic advance, a bearish signal that has previously led to drawdowns of more than 80%.
Despite the current risks, Bitcoin’s accumulation and adoption base is far stronger than in prior market cycles, according to data.
In an X post, Brandt highlighted that Bitcoin bull market cycles have followed parabolic advances with exponential decay over time. In each prior cycle, once a major parabola was violated, the price entered a prolonged corrective phase. Historically, these declines have peaked at less than 80% from the cycle high, but they have nonetheless been severe.
According to Brandt, Bitcoin’s current parabolic structure has already failed, with BTC down roughly 20% from its all-time high.
While this does not imply an immediate collapse, it places the market in a zone where downside volatility has historically expanded, particularly when global financial conditions tighten. If history repeats itself, an 80% decline for BTC would be a revisit to the $25,000 range over the next few months.
The technical warning is unfolding as macroeconomic liquidity risks rise. Polymarket is pricing a Bank of Japan (BOJ) rate hike at a 97% probability, with markets expecting a 0.25% increase on Dec. 19.
In the past, the BOJ tightening has been hostile to global risk assets. When Japan raises interest rates, yen carry trades unwind, global funding conditions tighten, and leveraged positions are forced to deleverage. Bitcoin has reacted negatively to the last three BOJ hikes, falling roughly 27% in March 2024, 30% in July 2024, and another 30% in January 2025, according to crypto commentator Quinten.
Bank of Japan is about to hike rates with 0.25% on December 19Bitcoin dumped the last 3 times the BoJ hiked interest rates:March 2024 → -27%July 2024 → -30%January 2025 → -30% pic.twitter.com/GNjHyUIV3d
Source: CoinTelegraph
