Bitcoin (BTC) is once again in the spotlight as veteran trader Peter Brandt warns that BTC has breached its parabolic trendline, a technical indicator that has historically preceded significant drawdowns in previous bull markets. Although this signal is bearish, the current market structure exhibits a crucial difference from past cycles.
Key takeaways:
Peter Brandt indicated that Bitcoin has broken its ongoing parabolic trend, a bearish sign that has previously resulted in drawdowns exceeding 80%.
Despite the existing risks, Bitcoin’s accumulation and adoption metrics are considerably stronger than in earlier market cycles, according to available data.
Bitcoin’s parabolic breakdown heightens risk of an 80% drop
In a post on X, Brandt pointed out that Bitcoin bull market cycles have typically followed parabolic advances, which eventually decay over time. Historically, once a major parabola is breached, the price tends to enter a long corrective phase. Such declines have historically peaked at around 80% from the cycle high, indicating significant downturns.
Brandt suggests that Bitcoin’s current parabolic structure has already failed, with BTC falling approximately 20% from its all-time high.
While this does not necessarily indicate an immediate downfall, it positions the market in a region where downside volatility has historically intensified, especially when global financial conditions tighten. If history is any guide, an 80% drop for BTC could see prices revisiting the $25,000 level in the coming months.
Macroeconomic pressures compound the technical breakdown
This technical alert arises as macroeconomic liquidity risks are on the rise. Polymarket indicates a 97% probability that the Bank of Japan (BOJ) will hike rates, with expectations of a 0.25% increase on Dec. 19.
Historically, BOJ tightening has had adverse effects on global risk assets. Rate hikes often result in the unwinding of yen carry trades, tightening global funding conditions, and forcing leveraged positions to reduce exposure. Bitcoin has responded negatively to the last three BOJ hikes, experiencing declines of around 27% in March 2024, 30% in July 2024, and another 30% in January 2025, as noted by 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 dynamics have changed 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 increase indicates Bitcoin’s transition into a strategic balance-sheet asset rather than merely a speculative trade. Furthermore, the supply among long-term holders remains high, and spot ETF products have brought in more stable, institutionally driven inflows.
While these changes do not eliminate downside risk, they imply that future drawdowns may be smaller and more driven by absorption compared to previous market cycles.
Related: Bears take over below $90K? 5 things to know in Bitcoin this week
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