The founder of ZX Squared Capital, Zheng, believes that the current downturn may last throughout the year. He names the four-year cycle $BTC associated with the halving mechanism as one of the main factors, as well as military escalation in Iran.
The expert warned that in the event of a market crash, some companies that acquired bitcoins as a treasury asset may begin to liquidate their reserves. This may happen due to the need to service debt obligations against the backdrop of worsening economic conditions and falling quotes of technology companies.
According to Zheng, such a scenario could trigger a chain reaction of falling prices in the cryptocurrency market.
On Friday, March 6, the US market fell amid a sharp rise in Brent crude oil prices, which reached $94 per barrel. The NASDAQ technology index fell by 1.59%. Following this, Bitcoin dropped below $68,000.
All this is happening against the backdrop of a four-year cycle $BTC that is difficult to disrupt, as such cycles are largely formed by the psychology of market participants, noted the founder of ZX Squared Capital. Private investors typically buy assets amid excitement and sell them during panic, which intensifies the cyclicality of price rises and falls.
Because of this, Bitcoin, in Zheng's opinion, continues to behave more like a speculative asset than a safe haven instrument like gold.
Earlier, expert and co-managing editor of CoinDesk Omkar Godbole stated that a new Bitcoin rally could begin under one condition — if the price holds above the $74,000 level.