Bitcoin's Bearish Descent: A Potential Drop to $38,000 Signified by Historical Patterns Bitcoin is currently navigating a period of intense bearish pressure, having breached the $70,000 and $65,000 marks. This ongoing decline is part of an extended corrective phase that began after Bitcoin topped out at $126,000 in October 2025. While crypto participants offer varied predictions on when this correction will bottom out, a prominent crypto analyst, known as Sherlock, has presented a compelling argument suggesting a potential plunge to $38,000 based on past market cycles.
A Deep Dive into Historical Drawdowns
Sherlock's analysis meticulously examines Bitcoin's performance during previous bear markets, highlighting a consistent pattern of diminishing drawdowns. In 2011, Bitcoin experienced a staggering 93% drop from its peak. This severe correction was followed by an 86% drawdown in 2015, an 84% reduction in 2018, and a 77% fall during the 2022 bear market. The underlying trend reveals that as Bitcoin and the broader crypto market have matured, grown in size, liquidity, and participation, the percentage of peak-to-trough declines has progressively lessened.
The $38,000 Projection and Market Debates
Extrapolating this decreasing drawdown trend, Sherlock projects that the current market correction should see a drop around 70%. Should this hold true, a 70% retracement from Bitcoin's recent all-time high of $126,000 would place the next market bottom squarely in the $38,000 region. This projection has sparked considerable debate, with some market participants suggesting a shallower correction, perhaps around 55% or 60%, citing increased institutional involvement and overall market maturity as mitigating factors. However, Sherlock counters these arguments, emphasizing that market reflexivity can amplify downside movements just as readily as it fuels rallies. At the time of writing, Bitcoin is trading around $64,850, having rebounded from an intraday low of $60,255. A return to the $38,000 level would effectively rewind Bitcoin's price to levels last observed in October 2023, marking an early stage of its previous bull market.
