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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Now, there has been a lot of, you know, sort of a lot of expression, um, by people that that sort of express like frustration with the market and and try to find a reason for, you know, why the bare market is happening. And and and the narratives can be quite, uh, pervasive. I mean, there there's all sorts of reasons that that people want to come up with. But I I think the important thing to recognize, uh, with Bitcoin is that this is very, it has been and it continues to be a very much cyclical thing. Historically, Bitcoin has topped in the fourth quarter of post-halving years. This is what historically happens. Q4 of 2013, Q4 of 2017, Q4 of 2021, and Q4 of 2025.
Now, every single time that Bitcoin has topped, we could find a narrative to support it. In some cycles, the narrative could be there was too much speculation in the altcoin market and therefore it warranted a correction. Back in 2017, think back to the ICO boom. Um, in 2021, we had, uh, a pretty big, a pretty long season where altcoins were outperforming Bitcoin and and you could so you could justify that one of the reasons for the bare market was to wipe out all the bad actors in the space, the ones that were not really doing business the right way. You know who I'm talking about.
And then in 2025, right? The narrative is completely different because it's not like it's not like there was a massive rotation into altcoins. It's not like there there's been as much egregious stuff. It's just that this time, people just stopped caring. And and this is something that I've talked about a lot. If you look at, say, the social risk in the cryptoverse and you color code Bitcoin by the social interest, there's just not a lot of people here. And so, like, the reason, the reason for why Bitcoin is dropping, if you need one, I don't really think you need one because it always tops in the fourth quarter of the post-halving year. But if you truly needed a reason, the reason could just simply be that no one cares. The bid has been taken away for a little while.
Now, that might sound scary, but as I've said before, the same thing actually happened in 2019. You know, we we topped on apathy. The only difference is that back then, it did not correspond to the end of a four-year cycle, but we still topped on apathy. Nevertheless, it corresponded to an end of quantitative tightening. And then we just simply waited until much looser monetary policy came. And this cycle, that much looser monetary policy just has not arrived. And I do not think it's going to arrive in the short term. I told you guys last year to expect Bitcoin to stay bearish for the first half of 2026, primarily due to a lot of macro headwinds and also, of course, the four-year cycle, right? Like that's what makes the most amount of sense.
Um, it's not always a popular narrative, and I I know that people would prefer the super cycle and and all that other stuff. But you could argue it's kind of a beautiful thing that Bitcoin does this every four years because it's a way for that for the asset class to reset. It's a way for everyone to focus on what matters. And so, in the short term, you know, if you look at at Bitcoin price action, it it's been relatively lackluster.
Now, a lot of times what happens is that Bitcoin drops into February. February 2018, uh, it wasn't exactly like this in 2022, but there was a drop here into February. And then in 2014, there was also a drop into February. So, what you'll find is that in the bare market, February tends to be a time when Bitcoin, it drops into February. This is something we've seen happen many times. And in fact, you could argue it's happened to some degree every single cycle. What happens after it is that Bitcoin finds a local high in March. So, you can see a local high in early March 2014, a local high in early March of 2018, and then a local high in March right here of 2022.
So, the unfortunate part is that this current move by Bitcoin is looking less like 2018 and maybe more like 2014, or more like what you saw in May of 2022, which you could also argue is a relevant comparison, especially when you look at the market like this. If you look at the market like this, what you could argue is that what if Bitcoin is just simply right here? If you want to compare to 2022, because in that case, what happened there was a long wick down and then after that, Bitcoin slowly bled and then a few weeks later, there was a spike upwards to draw people back in and then the market dropped again.
Now, if that were to happen over here, what it could look like would be a short drawdown, a spike into early March, and then another drop going into April and May. You'll notice that there's been plenty of times where Bitcoin in midterm years is very weak going into the months of April and May. So, there's weakness in February, and then April and May. So, you'll see that right here, right? February. Then, the next low was in April. And then in 2018, it was not a lower low, but there was weakness in April, going into April before. I mean, the weakness started in early March, but I'm just saying the next low was formed in in April. And in, uh, 2022, it ended up being a a little bit later, right? But I mean, you had you had weakness into February, local high in March, and then a low in May. So, April, May, and then there was another low in June, which we've also seen a lot, right? Even in 2018, there was another low in June. Uh, in 2014, there was another low, um, a little bit later in the summer, right? Maybe going into the early fall. But it it very much is a cyclical thing where February tends to be very, very weak, and then there's a little bit of renewed interest going into March, and then more weakness again in April, May, going into the summer. And then the only question is, is after the summer, do you see any more weakness beyond that? Because there are times where you get a final drop in the fourth quarter.
Now, that doesn't mean we have to. We might not get that, but that is just how it is historically played out. So, that is my best guess as to how this is playing out. We, you know, Bitcoin went down to 60K already, which is essentially the same level, just one-tenth back in 2018. It was 6K instead of 60K. In 2019, it also corresponded roughly to around 6K, and that was after a 50% drop. So, when you look at this market, I think what it makes sense to say is that this is the bare market resistance band until proven otherwise. And otherwise will likely be proven, but more than likely, it won't be durably proven until later this year. Could you have a moment where we get back above it briefly, like what happened in 2022, like what happened in 2018? Yeah, that's possible. But in order to durably get above it, I think it's probably going to take until, more than likely, it'll probably take until 2027.
Now, right now, the bull market support band is actually quite a bit higher than current prices. It's currently around 90,000 to 94,000. So, it's going to take some time for that to come down. In fact, in 2018, after Bitcoin had that February low, Bitcoin then just kind of bounced back and forth between the bull market support band until the bull market support band squeezed Bitcoin into making a decision between the prior support at 6K and the bull market support band or bare market resistance band, and Bitcoin chose down. Even in 2022, right after this massive drop, Bitcoin went sideways for a while until the until the bare market resistance band caught up, and then it forced it to make a decision, and then Bitcoin chose down.
So, it's a very common thing, and you'll see it happen many times where Bitcoin will just kind of go sideways, slightly bullish bias, into the bare market resistance band until it makes the Bitcoin decide, and then it goes down. So, that I think is how this is playing out right now. There's all sorts of narratives and whatnot, but I think that's the the cleanest view of this market because it does not rely on on a super cycle bailing anyone out. It does not rely on an alt season. It just simply relies on the chart and the data and saying, "Look, people have lost interest in in in crypto right now." And the most similar time this is to is 2019. And even in that case, um, you know, it we stayed, it was a bare market lasted about like six months or so. And I mean, it did drop 50%. We did eventually get a 70% drop. And that's one of those things where it's hard to know what would have happened in 2019, 2020 had there not been the pandemic. We don't know.
Um, but it could be one of those things again where it's like every cycle, it feels like to a lot of people, like it feels like the bare market's over by the summer, and then in Q4, something happens, right? Like in 2022, it was FTX. Um, so every cycle, like, and then of course, in 2020, it was the pandemic. I don't know what it's going to be this time, but there's all there's all sorts of narratives as to, you know, to what it might be. And the reality is is no one ever knows what it's going to be because what I have found is that in the bare markets, it always ends up being something that no one expects because if everyone expected it, the market would already price it in. So, it ends up coming out of left field, and usually it comes out of left field sometime in Q4.
And I think like fundamentally, the reason why it happens is there are businesses that partake in bad business practices in the bull market, and then that comes to the surface in the bare market. And so, for a while, they're able to hide things, but after six to 12 months of lower and lower prices, eventually they can no longer hide their problems, and then it comes to the surface in the form of the FTX collapse, whatever, right? It ends up being something. LA, I mean, before that, it was the pandemic, um, that that kind of messed everything up. So, that's not really a crypto thing. So, it could be one of those things where it's not even a crypto thing that causes it. It could be, uh, a weakening labor market, right? It could be inflation spiking. It doesn't really seem like that's the most immediate concern, but maybe it'll be a concern later this year. Uh, it could be geopolitical risk, and no one really knows. But my guess is that it ultimately plays out the same way if given a long enough period of time.
So, those are my views. Thank you guys for tuning in. Make sure you subscribe, give the video a thumbs up. If you want to read about it, if if these videos really aren't your thing as much and you want to read about it, you can, um, uh, go over to my website, benjamincowen.com, and if you go to reports, you can sign up. You don't even have to sign up. You can just go to get report. And if you want to get the PDF, just put in your email. But if you don't want to put in your email, that's fine. You can just scroll down and then you can read the report. It'll it'll load. It's a pretty long report, like it's like 15 pages, but it'll load. And then you can read the report there if you prefer. So, make sure you guys check that out. Um, benjamincowen.com. We'll put the links in the description below. But that'll wrap it up. Thank you guys for tuning in. Subscribe, and I'll see you next time. Bye.