The next crypto bear market may be triggered by broader economic cycles, warns analyst Willy Woo, suggesting a departure from previous patterns. Woo believes that the upcoming downturn could be particularly severe, influenced by business cycle dynamics the crypto market hasn't yet encountered.
Historically, crypto bear markets have been largely shaped by Bitcoin halving events and fluctuations in the global M2 money supply, typically influenced by central banks on a four-year cycle. However, Woo posits that the next downturn will mirror broader economic cycles, similar to those observed in 2001 and 2008, prior to the emergence of cryptocurrency markets.
A business cycle downturn, often referred to as a recession, entails economic contraction marked by declining GDP, rising unemployment, reduced consumer spending, and slower business activity. Woo emphasizes that crypto markets are not immune to these broader economic forces, particularly regarding their impact on liquidity. Past downturns, such as the dot-com bubble in 2001 and the 2008 financial crisis, led to significant stock market declines and economic hardship, potentially impacting crypto markets in a similar fashion.
The National Bureau of Economic Research (NBER) uses indicators like employment, personal income, industrial production, and retail sales to identify recessions. While a brief recession occurred in early 2020 due to pandemic-induced lockdowns, no immediate recession threat is apparent, although risks remain elevated. Trade tariffs have further complicated the current cycle, affecting GDP growth in 2025 and projected to continue into 2026.
Woo's analysis suggests that markets are speculative and factor in future events, including changes in the M2 money supply. He proposes that Bitcoin might be signaling a market top or preparing to align with broader economic trends.
Adding another layer to the analysis, Woo has observed that early Bitcoin whales are slowing price gains by selling large holdings. A single whale's rotation of $2 billion from BTC to ETH triggered a rapid market drop. This activity, coupled with the fact that significant quantities of dormant Bitcoin may still be sold, adds to market volatility. In August 2025, Woo also revealed that Bitcoin's market is currently being driven largely by investments from high-net-worth individuals (HNWIs), a stark difference from previous market cycles.
It's important to note that in the past, Woo's analysis hasn't always pointed towards bearish sentiments. In early 2022, despite observing "peak fear" levels, Woo suggested that on-chain metrics indicated that Bitcoin was not in a bear market. He cited a strong number of long-term holders and growing rates of accumulation as evidence. However, more recently, Woo exited his Bitcoin position, warning that BTC is flashing similar 2013 bearish divergence signals. He pointed to Bitcoin's market value to realized value (MVRV) Z-score as signaling a possible downtrend.
While Woo's analysis provides valuable insights, the crypto market remains inherently volatile and influenced by a multitude of factors.
