One analyst warns that Bitcoin could rally to around $38,000 if the historical 70% drawdown pattern repeats, while others argue that deeper institutional flows could push the upper bound of the correction closer to 55%-60%.
summary
- Analyst “Sherlock” has mapped historical drawdowns of 93%, 86%, 84%, and 77% to predict a decline of around 70% this cycle, suggesting Bitcoin’s bottom will be around $38,000.
- Critics of X counter that previous top-to-bottom movements and bottom-to-top gains suggest a shallow 55% to 60% correction, and argue that financial institutions could soften the downside.
- Sherlock responded that recursion can undermine bidirectionality, and warned traders that trying to time the perfect bottom as Bitcoin climbs back to October 2024 levels is risky.
Bitcoin (BTC) continues to trade under bearish pressure as analysts debate the potential depth of the current correction, with one market observer predicting the cryptocurrency could fall as low as $38,000 based on historical drawdown patterns.
Analysts point out that Bitcoin may fall to the $38,000 level
As part of the correction phase that began after Bitcoin reached its all-time high in October 2025, the cryptocurrency has fallen below key support levels, widening its decline, according to market data.
Bitcoin bear market drawdowns have a clear pattern.
2011: -93%
2015: -86%
2018: -84%
2022: -77%
As the market matures, the drawdown gets smaller each cycle.
Following this trend, the bottom in 2026 should be around -70% from the ATH of $126,000. That’s $38,000.
Good luck…
— Sherlock | DeFi researcher (@Sherlockwhale) February 5, 2026
A cryptocurrency analyst known as Sherlock posted an analysis on social media platform X examining Bitcoin’s historic bear market drawdown and its long-term trajectory. The analysis noted that Bitcoin’s 2011 cycle experienced a drawdown of approximately 93% from peak to trough, representing the largest correction in the asset’s history to date.
According to the data cited, the subsequent bear market has gradually become smaller in decline. The 2015 cycle saw a drawdown of about 86%, followed by 84% in 2018 and about 77% in the 2022 bear market.
The analyst predicted that if this pattern continues, the current cycle would see a drawdown of about 70% from all-time highs, and Bitcoin would bottom near $38,000.
This forecast sparked significant interest in X, with some market participants suggesting that increased involvement by institutional investors and market reflexivity could limit downside risks. One answer argued that the next drawdown should be closer to 55% or 60% instead of 70% when comparing the previous bottom-to-top movement and top-to-bottom decline.
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Sherlock responded that reflexivity can amplify downside as well as upside moves, and cautioned traders against trying to time their purchases at specific bottom targets.
Bitcoin was trading at levels not seen since October 2024, according to data from CoinGecko. The last time this cryptocurrency traded around its current price level was in October 2023, during the early stages of the last bull market.
The asset has rebounded from intraday lows but remains under pressure as market participants assess whether the correction is over.
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