Analyst Benjamin Cowen now warns that Bitcoin could face a 70% drawdown in the next bear market as history and macro trends align.
Bitcoin historically crashes by around 70% from its peaks in bear markets. Benjamin Cowen, founder of Into The Cryptoverse, believes so and argues that the cryptocurrency could be headed for a massive crash once the current cycle peaks.
He pointed to past bear markets where Bitcoin lost 94%, 87% and 77% from all-time highs. While the numbers differ by cycle, the pattern of heavy drawdowns after halving events has been consistent since 2009.
What are the odds that this time will be different?
Cowen explains that Bitcoin tends to follow familiar patterns. Gains build through summer, weakness shows up in September, and peaks often occur in the fourth quarter.
After that, corrections arrive and prices crash again..
Cowen made these predictions to Kyle Chasse in an interview published on Thursday, and noted that something happened in 2019. Bitcoin fell below its bull market support band during a period of monetary tightening.
This said, the band, formed by the 20-week simple moving average and the 21-week exponential moving average, has historically marked trend changes.
If global conditions tighten again, Cowen expects a similar setup.
Cowen also doubts that Bitcoin will reclaim its 2020 market dominance peak of 70%. Instead, he expects it to settle closer to 60% as altcoins grow.
As of writing, Bitcoin holds a 57.19% share of the crypto market. The expansion of Ethereum, DeFi tokens and newer projects has diluted Bitcoin’s dominance so far, and Cowen argues that this shows a maturing industry where investors seek exposure beyond Bitcoin.
Ethereum, in particular, could outperform toward the cycle’s end.
Cowen predicts that ETH will show weakness in the short term, but gain strength later, with the ETH/BTC ratio likely climbing again.
History shows that euphoric rallies often lead to strong corrections. Cowen notes that many investors expect one last surge before the top. If that happens, he plans to take profits and wait for opportunities next year.
He reminds traders that cycle tops are never obvious in real time.
Excitement usually hides the signs of exhaustion until the decline is already underway. This cycle may follow the same playbook, even if new participants hope for a different outcome.
Arthur Hayes, co-founder of BitMEX, has noted that Bitcoin could reach $250,000 by year’s end. If that happens, a 70% drop would still leave the price around $75,000.
Other commentators like Matt Hougan believe that historical patterns no longer hold water, and the four-year cycle might be dead.
Beyond crypto cycles, general financial conditions also play a major role in Bitcoin’s future. Cowen stressed the link between Bitcoin and equity markets since 2020, where both tend to rise during liquidity expansion and fall when conditions tighten.
The Federal Reserve’s next moves are being watched closely. A trend toward higher interest rates or reduced liquidity could weigh heavily on Bitcoin. On the other hand, continued institutional inflows and strong equity markets could extend the rally.
Institutional activity, too, is expected to play a role. Large holders, who influence supply and demand, recently sold nearly 97,000 BTC in a single day.
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