Analyst Willy Woo believes that the next round of the cryptocurrency bear market may be particularly severe, driven by an unprecedented downturn in the business cycle within the crypto space.
According to Woo on Monday, the next bear market will be dominated by another cycle that people have long overlooked.
Woo pointed out that in the past, we have experienced two cycles based on Bitcoin (BTC) halving events every four years, combined with the global M2 money supply.
Woo stated, "Central banks drive M2 depreciation in four-year cycles, and these two factors together impact the market."
However, Woo explained that the next bear market will be dominated by the business cycle. He noted that the last significant downturn in the business cycle occurred in 2008 and 2001, at a time when the crypto market had not yet emerged.
A downturn in the business cycle refers to the economy entering a contraction phase, characterized by a decline in GDP, rising unemployment rates, reduced consumer spending, and slowing business activity. This phase is known as a recession, following a period of expansion.
Woo pointed out that the crypto market is not isolated and will be affected by broader economic cycles, especially in terms of liquidity.
The 2001 business cycle downturn, also known as the "dot-com bubble," saw rising unemployment rates, and the U.S. stock market (S&P 500) fell by 50% over two years. This crisis was triggered by the collapse of overvalued tech companies and excessive speculation.
In 2008, during the "financial crisis," GDP contracted sharply, unemployment rates surged, and the S&P 500 index dropped by 56%. This crisis stemmed from the subprime mortgage crisis, the collapse of the banking system, and a credit freeze.
The National Bureau of Economic Research (NBER) determines recessions based on four key indicators: employment, personal income, industrial production, and retail sales.
At the beginning of 2020, the pandemic lockdown caused a spike in these indicators, but that recession was extremely brief. There is currently no immediate threat of recession, but the risks remain high.
This cycle is further complicated by the implementation of trade tariffs, which have weakened economic growth in the first half of 2025 and are expected to continue dragging down GDP growth into the first half of 2026.
Woo concluded that the market is speculative and will reflect future events, including M2 money supply, in advance. Woo said, "Either Bitcoin has already signaled a top to the global market, or Bitcoin will catch up."
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