Bitcoin Parabola Breakdown Signals Potential for 80% Correction, According to Veteran Trader

The price of Bitcoin is again under the spotlight as veteran trader Peter Brandt warns that BTC has broken its parabolic trendline. This technical feature has often preceded significant declines during previous bull markets. However, the current market structure shows some key differences from previous cycles.

Key Takeaways

Peter Brandt indicates that Bitcoin has broken its parabolic advance, a bearish indication that has historically led to corrections of over 80%.
Despite the current challenges, Bitcoin's accumulation and adoption rate is stronger compared to earlier market cycles, according to available data.

Peter Brandt emphasizes that Bitcoin has experienced a break in its parabolic growth, marking a bearish trend that has historically led to substantial declines of over 80%. However, data suggests that the current accumulation and adoption landscape for Bitcoin is much stronger than in previous market cycles.

In a post on X, Brandt highlighted that Bitcoin's bull market cycles typically exhibit parabolic growth followed by sharp declines. In earlier cycles, once a major parabola was disrupted, the price often entered a lengthy correction phase. Historically, these declines have seen Bitcoin's price drop by nearly 80% from peak values, though such drops have been significant nonetheless.

Bitcoin analysis by Peter Brandt Bitcoin one-week analysis by Peter Brandt. Source: X

According to Brandt's findings, Bitcoin's existing parabolic framework has already broken, with BTC falling approximately 20% from its all-time high. While this does not suggest an imminent crash, it places the market in a zone historically characterized by increased downside volatility—especially when global financial conditions become tighter. If past trends hold, an 80% drop for BTC could see prices return to around $25,000 in the coming months.

Bitcoin price analysis

Macroeconomic Factors Contributing to Technical Breakdown

This technical warning comes amid rising macroeconomic liquidity concerns. Market platform Polymarket is indicating a 97% probability of a rate hike by the Bank of Japan (BOJ), with expectations of a 0.25% increase on December 19.

Historically, BOJ tightening has adversely affected global risk assets. When Japan raises its interest rates, it leads to the unwinding of yen carry trades, tighter global funding conditions, and the forced deleveraging of leveraged positions. Price declines for Bitcoin have followed the last three BOJ rate hikes, with drops of approximately 27% in March 2024, 30% in July 2024, and another 30% in January 2025, as noted by crypto commentator Quinten.

Bank of Japan rate hike announcement Bitcoin Treasuries accumulation. Source: Glassnode

Why This Bitcoin Market Cycle May Be Different

Despite these troubling signs, the demand for Bitcoin has evolved since 2022. According to Glassnode data, corporate Bitcoin treasuries rose from approximately 197,000 BTC in January 2023 to over 1.08 million BTC today, reflecting a staggering 448% increase.

This growth indicates that Bitcoin is transitioning into a strategic asset on corporate balance sheets rather than remaining merely a speculative investment. Additionally, the supply from long-term holders remains high, and the introduction of spot ETF products has brought in more stable, institutionally backed inflows.

While these developments do not eliminate the risk of downturns, they may suggest that future corrections could be less severe and more influenced by absorption than seen in past cycles.

Related: Bears take over below $90K? 5 things to know in Bitcoin this week