Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin's dubious speculation.
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So, Bitcoin has kind of been all over the place recently, and I, you know, I put out a video yesterday talking about the fact that there's sort of this like unfortunate pattern that's emerged on stablecoin dominance. If you didn't watch that video, I can condense it for you in about 30 seconds. Uh, where essentially we've seen this pattern many, many times where you have a chart that looks like it wants to break out, and then when it finally does break through these highs, and then gets one final pullback before running.
Now, I don't know how far down it's going to go before it starts to run. If it goes all the way down to the bull market support band before bouncing, then it could mean that Bitcoin itself goes up to its own bull market support band. The timing of that is actually very difficult, and I want to show you guys why it is so hard to predict these short-term moves, also under the context as well as to what will be happening on Friday.
So, on Friday, we have a lot of stuff coming out. One of the things we have is the labor market data, right? We're going to be getting the unemployment rate tomorrow. And, you know, depending on where that comes in, obviously, it could have an effect on Bitcoin. If it comes in really high, that would probably be a negative thing for Bitcoin. If it comes in low, probably a positive thing for Bitcoin. If you don't believe me, if you just simply look at the price of Bitcoin and you overlay the unemployment rate, what you'll genuinely or generally notice is that whenever Bitcoin was stalling out, it tended to correspond to the unemployment rate going higher. This purple line, right? So, when whenever it stalled out, typically the unemployment rate was going higher. You can see in 2023 and 2024, and also more recently going into 2025, 2026. And what you'll also notice is whenever it stalled out and started going sideways, that is when these breakouts by Bitcoin actually occurred. So, the unemployment rate, of course, could have some effect on on Bitcoin depending on where it comes in at.
Now, I have obviously made the comparison quite frequently to 2019, and one of the reasons for that is if you look at the 2019 bare market that Bitcoin had, it actually occurred on an apathy peak, right? We topped on apathy rather than euphoria. You can actually see that pretty clearly if you go look at the social interest in crypto. You color code the price of Bitcoin by social interest, and you'll see we topped on apathy back then, just like we did over here. Quantitative tightening also ended back then, just like it ended in December of 2026, right? Just back then it was August, Bitcoin topped in June, two months earlier. This time it was December, Bitcoin topped October, two months earlier. Same thing, same playbook. We've read this story before. It's just there's some people that pretend like they haven't read the story before, but we have read this story before.
And so, when you look when you compare sort of this downturn over here in 2019 with the current one, one of the things you'll notice is that it was a slower bleed, right? And and we've talked about that before. If you look at the bare markets for Bitcoin, generally ROI from the peak, and you just simply look at all these prior bare markets, one of the things you'll notice is that the current bare market is actually holding up a bit better than the others. Right now, Bitcoin ROI from the peak this cycle is 73. But the prior three cycles was 65, 46, and 0.53 respectively. So, this cycle so far is having a lesser drawdown. Now, that could be due to diminishing losses, just like we have diminishing returns. But the other reason could be, hey, because we topped on apathy rather than euphoria. Instead of comparing this bare market to three bare markets previously, what if we compare it to the bare market in 2019, which it actually matches a lot closer? So, that continues to be what I focus on right now is this comparison to that 2019 bare market where Bitcoin slowly went down, and a lot of people had questions back then too. Didn't make sense. Lot of bullish news. Why was it dropping? It was dropping just because attention left crypto. Attention was gone, and it took a big change for attention to ultimately come back. And so, when you look at the 2019 bare market and you compare it here, what you'll notice is there's a lot of similarities in terms of where that ROI has historically been in comparison to the ROI back then.
Now, when you look at short-term moves, it's really, really difficult, right? One of the things we know is if you look at say, like the bull market band or the 50-week moving average, you'll frequently see that oftentimes in bare markets, Bitcoin likes to backtest those levels and print macro lower highs. Sometimes just the bull market support band. And so, arguably, at some point early this year, Bitcoin will backtest its bull market support band, just like it did in 2022, just like it did in 2018, and also just like it did in 2019. The hard part is knowing exactly when it's going to happen.
And tomorrow is a big deal because not only do we have the unemployment rate, but we also have the Supreme Court potentially providing an opinion on the tariffs. So, there's a lot of stuff that's coming out, and who knows exactly what Bitcoin's going to do. A lot of people pretend to know what it's going to do in the short term, but as I've said before, short-term price action is more akin to a random walk or geometric Brownian motion for those that study physics. And so, it cannot really be predictable.
I want to show you guys just how difficult it is through the lens of the 2019 move, right? So, if you actually zoom in to 2019, one of the things you'll notice is is what Bitcoin did. So, it set a high pretty early on. You see that high? And it also set a low. And what it did was it set the high, right? Set the high. The low when it came back down, it set a higher low, and then it took out that high, and then it took out the low, and then it rallied to the bull market support band. Right? So, imagine, right? Like I was, you can go back and look at my channel. Try to explain that to someone, right? You're like, "All right, you know, when the price of Bitcoin was say $8,000, imagine saying, okay, it's going to go to $8,500, then back down. It's going to print a higher low at 77, then it's going to go up. It's going to get close to the bull market band, and then it's going to go put on a lower low, and then it's going to rally to the bull market band." Like, it's impossible to articulate a path like that without having people say, "Well, but you said it was going to do this, right?" And if you say it's going to tag the bull market band, it got close, didn't do it, then printed a new local low, then rallied up, and then went to a slightly lower low.
Now, if you look at the comparison to today, it's really difficult, right? Yeah. Like, will Bitcoin hit the bull market support band? At some point, it probably will, but you can also see it has set some highs, it has set some lows, and at this point right now, it hit a it had a a low. It printed a high, it printed a higher low. It's now printing a higher high. So, it's going through the same pattern that it did in 2019. I can't tell you for sure if it's going to go straight up and tag it and then come back down, or if it's going to sweep the prior low and then go back up. But what I do know is that historically, that is where the macro lower high typically happens when you are in fact in a bare market.
If you don't think we're in a bare market, that is fine. You don't have to believe that it's a bare market. Maybe the super cycle guys are right. But I'm saying with the evidence that I have, and the fact that it seems like we've topped on apathy two months before quantitative tightening ended, just like 2019, and it looks like social interest is still trending down. Historically, we have bare markets that start in the fourth quarter of the post-halving year, and it's just hard to sit here and be like, "Oh, well, this time is different." I think whether you want to compare it to 2018, uh, 2018 and 2022, or you want to compare it to 2019, in the short term, it still would likely lend itself to a macro lower high.
Now, where it gets murkier would be this summer, and and and by October, especially, that's where it starts to get murkier on which path does it actually follow. But in the short term, that is what I'm running with. And that's why I call it, you know, we call it dubious speculation because I I think that that's how ultimately this will play out, right? You you'll set a macro lower high near the bull market support band. It might correspond to the 50-week moving average. It might correspond to the 200-day moving average. Of course, could correspond to a lot of things. Those are moving targets, but ultimately, that's what is the most likely outcome at some point within the first few months of 2026. I told you guys not to expect the counter-trend rally to the bull market band until 2026. Now that we're in 2026, it's open for possibility in 2025. We said no, it needs we probably need to wait until 2026. Now that it's here, it is a possibility that we should at least consider.
So, that is where I am right now on on Bitcoin and sort of thinking in terms of like what's currently going on in in the market cycle. And the reason why I'm more open-minded now to that counter-trend rally, even if we do sweep the lows, is a lot of times after you get three red months in a row, like we saw, uh, in earlier 2021, and then in kind of like late 2021, early 2022, and also in 2019, after you get those three red months in a row, um, on average, you know, it looks like you get a green month somewhere in there on that fourth month. Now, are there times where Bitcoin drops three months in a row and you don't get a fourth month that's green? Absolutely. But there's also an example right here, right? If you get three months in a row, often times you'll get some type of relief. But again, there are examples where you go four in a row.
What I would say is to expect a macro lower high by Bitcoin, um, sometime in the first quarter of this year, that will then lend itself to a slightly lower low by the summer of 2026. That is my guess. I know it's dubious speculation. Maybe the market will rip higher and I'll be eating these words. But that's the dubious speculation I have for you guys, especially through the lens of that stablecoin dominance chart that we started the video off on.
Could stablecoin dominance drop and go to the bull market and allow Bitcoin to go up to its bull market? Absolutely. I know some people said, "Well, if they just kept printing more stablecoins, stablecoin dominance could go up regardless." Well, that's true. Historically, if stablecoin dominance is going up a lot, like it has been, that does generally correspond to lower asset prices in the cryptoverse.
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