The price of Bitcoin (BTC) is once again under examination as veteran trader Peter Brandt warns that BTC has breached its parabolic trendline, a technical indicator that has historically preceded significant downturns in previous bull markets. While this signal appears bearish, the current market dynamics indicate a crucial distinction from earlier cycles.
Key takeaways:
Peter Brandt noted that Bitcoin has broken its current parabolic advance, a bearish indication that has typically resulted in drawdowns exceeding 80%.
Despite current risks, data shows that Bitcoin’s accumulation and adoption levels are much stronger than in earlier market cycles.
Bitcoin’s parabolic breakdown increases risk of 80% decline
In a post on X, Brandt pointed out that Bitcoin bull markets have followed parabolic advances that eventually lead to exponential declines. Historically, once a major parabola is breached, the price typically enters an extended corrective phase, with declines reaching as high as 80% from the cycle peak.
Brandt asserts that Bitcoin’s existing parabolic structure has already failed, with BTC approximately 20% down from its peak.
Although this does not guarantee an immediate collapse, it places the market in a position historically characterized by increased downside volatility, especially as global financial conditions tighten. Should history repeat, an 80% fall for BTC could bring it back to the $25,000 level within the upcoming months.
Macroeconomic pressures compound the technical breakdown
This technical alert emerges as macroeconomic liquidity risks rise. Polymarket is indicating a 97% likelihood of a Bank of Japan (BOJ) interest rate increase, with a 0.25% hike expected on December 19.
Past experiences show that BOJ tightening has negatively impacted global risk assets. When Japan raises rates, yen carry trades get unwound, global funding conditions tighten, and leveraged positions face forced deleveraging. Bitcoin has shown a negative reaction to the last three BOJ rate hikes, dropping approximately 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 19
Bitcoin dumped the last 3 times the BoJ hiked interest rates:
March 2024 → -27%
July 2024 → -30%
January 2025 → -30% pic.twitter.com/GNjHyUIV3d— Quinten | 048.eth (@QuintenFrancois) December 15, 2025
Related: Bitcoin to $40K? Macro analyst Luke Gromen turns bearish on Bitcoin
Why this BTC market cycle may differ
Despite the similarities, Bitcoin’s demand structure has transformed since 2022. Glassnode data reveals that corporate Bitcoin treasuries have surged from around 197,000 BTC in January 2023 to over 1.08 million BTC today, marking a 448% increase.
This growth indicates Bitcoin’s evolution into a strategic balance-sheet asset rather than merely a speculative one. Additionally, the supply from long-term holders remains high, and spot ETF products have brought in more stable, institutions-driven inflows.
While these transitions do not negate downside risks, they suggest that future declines may be less severe and more absorption-driven compared to previous market cycles.
Related: Bears take control below $90K? 5 things to know in Bitcoin this week
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