PlanB Outlines 4 Bitcoin Bear Market Scenarios After 40% Drop

PlanB’s analysis begins by establishing the current market’s technical state. Bitcoin closed January at approximately $78,000, marking a significant retreat from its cycle peak of $126,000. More critically, the analyst highlights the 200-week moving average closing at $58,000 and the realized price—the average price at which all coins last moved—at $55,000. These two metrics are widely watched as long-term value anchors and potential support zones in bear markets.

The key signal for a regime shift, according to PlanB, comes from the Relative Strength Index (RSI). He notes the January RSI reading ended at 49. “RSI, as you know, is an index between 0 and 100. And everything above 50 is an uptrend. Everything below 50 is downtrend,” PlanB explained. “So 49 is below 50, it’s downtrend. It’s a bear market… similar to 2014–15, 2018–19 and 2022–23.” This reading frames the subsequent discussion of potential bear market depths.

From this technical foundation, PlanB outlined four scenarios for how the Bitcoin drawdown could evolve. The first is the historical “worst case” that remains in traders’ psychology: an 80% drop from the all-time high. From $126,000, this would imply a plunge to around $25,000. While PlanB presented this scenario, he acknowledged such a deep fall would “look really really odd” on the current chart, given the established support levels higher up.

The second scenario is more conventional based on his historical backtests: a bottom forming around the confluence of the 200-week moving average and the realized price, which he pegs in the $50,000–$60,000 range. PlanB pointed to prior cycles, like 2022 and 2015, where the price eventually dropped to these long-term average levels and the RSI found a trough concurrently. This zone represents a classic bear-market support test.

The third scenario posits a shallower retracement, potentially stopping just above the previous cycle’s all-time high of approximately $69,000. PlanB’s reasoning hinges on the character of the preceding bull phase. “Because the bull market was very weak… it didn’t have the red dots, the high RSI peaks,” he said, suggesting that a muted rally could translate into a less severe bear market. This would compress the cycle’s amplitude.

The fourth and most optimistic scenario speculated that the market had already printed its low at around $72,900. However, PlanB noted this scenario was invalidated when the BTC price subsequently dropped to $70,140, demonstrating the fluid nature of these projections and the market’s ongoing search for a durable floor.

Beyond the near-term scenarios, PlanB revisited his renowned stock-to-flow model, which derives a value signal from Bitcoin’s programmed scarcity. He reiterated that the model continues to point to a long-term valuation of $500,000 but stressed a crucial caveat: “Stock to flow says nothing about tops and bottoms.” He clarified that the model speaks to the “four-year average” and periodic “phase transition every four or five years,” making it a macro valuation tool, not a timing indicator for market turns.

This long-term view leads to a final, critical observation about the current market cycle’s potential deviation from historical patterns. PlanB noted that in the traditional four-year-cycle template, the price peak historically occurs in the first or second year after a halving event. “It didn’t happen after 2024 halving,” he stated. This anomaly leaves room for a potential upside phase later in the current cycle, even as the nearer-term focus remains on whether Bitcoin finds support at the realized price, holds above the prior all-time high, or establishes a higher low.

Ultimately, PlanB’s analysis presents a spectrum of possibilities for Bitcoin, anchored by technical indicators but acknowledging the unique dynamics of each cycle. The path forward hinges on whether the market reverts to deep historical drawdowns, respects the long-term average prices around $55,000-$60,000, confirms a shallower correction thesis, or carves out a new pattern entirely in a potentially shifting macro cycle for the flagship cryptocurrency.