Beware of the new type of Bear Market: Willy Woo warns that the next round of fall may be driven by a "business cycle recession", rather than Halving or M2 effects.

Crypto analyst Willy Woo has issued a warning that the next round of the crypto market Bear Market may be driven by broader economic forces - specifically, a traditional business cycle recession, rather than the predictable cycles related to past Bitcoin Halving events or changes in M2 money supply. As the last major business cycle recession occurred before the emergence of the crypto market (in 2001 and 2008), this would push the market into an 'unknown territory.' Although there is currently no imminent threat of recession, economic indicators, including trade tariffs, show that high-risk factors still exist and are expected to drag GDP growth down until the first half of 2026.

Traditional Cycle Model Fails: Business Cycle Becomes New Dominating Factor

Analyst Willy Woo pointed out that past crypto market cycles typically follow a predictable four-year pattern, which aligns closely with the Bitcoin Halving events and the global central banks' M2 money supply injections. Traders can anticipate market trends based on these two overlapping factors. However, Woo believes that the upcoming Bear Market will be entirely different, as it will be defined by the business cycles that track macroeconomic expansions and contractions. The last two major business cycle downturns (the 2001 dot-com bubble burst and the 2008 financial crisis) occurred before the birth of the crypto market, meaning that Bitcoin will be tested for the first time during a traditional economic recession.

Characteristics of Business Cycle Recession: Liquidity Tightening is Key

A typical downturn in the business cycle brings specific economic conditions: a contraction in Gross Domestic Product (GDP), rising unemployment across various sectors, declining consumer spending, and a slowdown in overall economic activity. These macro conditions will directly affect market liquidity. The crypto market is not independent of traditional economic forces. When an economic recession leads to a depletion of market liquidity, digital asset prices often face downward pressure. For example, the tech stock bubble of 2001 caused the U.S. stock market to drop by 50% over two years; while the financial crisis of 2008 was even more severe, with the S&P 500 index falling by 56% and the credit markets completely frozen.

Current Economic Outlook: Tariff Drag and Ongoing Risk Warnings

The National Bureau of Economic Research (NBER) identifies recessions by tracking four key indicators: employment levels, personal income, industrial production, and retail sales data. Although a brief recession occurred in early 2020 due to the pandemic, it was short-lived. Currently, there are no immediate signs of recession at the macro level. However, economic risks remain high and warrant caution. Trade tariffs have already negatively impacted GDP growth in the first half of 2025, and economists expect these tariffs to continue to restrict the pace of GDP expansion in the first half of 2026.

Market Signals and Trading Strategies: Pay Close Attention to Macroeconomic Indicators

The market often prices in future events in advance. Woo observed that this speculative nature also applies to the expectations of M2 money supply, suggesting that the current Bitcoin price trend may indicate that the market is at a peak or is preparing to catch up with the traditional market. Crypto investors now need to closely monitor several key data points: market liquidity trends, M2 money supply updates, and business cycle indicators. These factors could become key catalysts in determining the timing and severity of the next Bear Market. In the new cyclical pattern, the weight of macroeconomic data will significantly increase, and traders should expand their focus from purely on-chain data to the broader global economic environment.

Conclusion

Willy Woo's warning reminds the crypto market that it can no longer solely rely on past “Halving” cycle models, as macroeconomic business cycle recessions may become the dominant force in the next Bear Market. With Bitcoin never having experienced a traditional economic recession, the uncertainty of its price behavior increases. Investors should incorporate macroeconomic indicators into their risk assessment systems, paying particular attention to liquidity changes and the potential impact of trade tensions on global economic growth, thus making investment decisions more prudently.

Disclaimer: This article is for news information and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make cautious decisions.