Brief Summary
This video provides a damage report on Bitcoin's recent drop, analyzing potential market movements and comparing them to historical patterns. It emphasizes the importance of understanding macro regimes and the differences between euphoric and non-euphoric tops. The analysis suggests a likely continuation of the bear market with potential lower lows and highs, and a possible bottom in Q4 of the year.
- Bitcoin's price drop is analyzed in the context of historical patterns and macro-economic factors.
- The video suggests that Bitcoin is in a bear market and may continue to decline with potential lower lows and highs.
- The analysis points to a possible market bottom in Q4 of the year.
Intro
The video discusses the recent drop in Bitcoin's price and provides a damage report, examining potential market movements in light of historical patterns. It also touches on the idea of a rotation from metals into crypto and the importance of understanding macro regimes. The presenter encourages viewers to subscribe to the channel and check out Into the Cryptoverse Premium.
S&P vs Gold and Bitcoin's Correlation
The video explains why a rotation into crypto may not occur immediately following a drop in metals. Historically, when the S&P 500 breaks down against gold, it leads to corrections in risk assets rather than rotations. Since Bitcoin's existence is relatively recent compared to these historical patterns, it's crucial to consider pre-Bitcoin data to understand the macro regime. The presenter argues that this historical context suggests Bitcoin will likely continue to drop.
Tops on Apathy vs Euphoria
The video contrasts market tops based on euphoria versus apathy, noting that non-euphoric tops tend to result in slower drawdowns. Bitcoin's current drop from its highs is around 40%, similar to the drop seen in silver after a euphoric top. Despite this, Bitcoin's valuation against silver has decreased significantly over the past year, indicating silver has been a better investment. The presenter then examines whether the recent low represents a sweep of prior lows, specifically referencing the lows from April 2025 and March 2025.
Moving Averages and Counter Trend Rallies
The video discusses Bitcoin's historical behavior relative to its 50, 100, and 200-day exponential moving averages (EMA). Typically, Bitcoin falls through the 50 EMA, consolidates at the 100 EMA, and then drops to the 200 EMA. The presenter admits to not trying to time a counter trend rally, focusing instead on identifying a macro bottom for Bitcoin. While a counter trend rally is possible after sweeping lows, the presenter is more interested in a macro entry point.
Comparison to Stocks and Cyclical Nature of Bitcoin
The video explores potential counter trend rallies by comparing Bitcoin's current chart pattern to those of Nvidia and Google, which showed rallies to new all-time highs after sweeping prior lows. However, the presenter believes Bitcoin's cyclical nature makes it more likely to form a lower high rather than reaching a new all-time high in the short term. The presenter anticipates Bitcoin will continue to slowly decline for a few more months.
QT Ending Bare Market Chart
The video references the QT (Quantitative Tightening) ending bare market chart, noting its accurate tracking of Bitcoin's performance, excluding the pandemic period. Historically, Bitcoin finds a low, rallies, forms a lower high, and then establishes a slightly lower low. The presenter highlights that non-euphoric tops lead to slower market bleeds compared to the rapid drops seen after euphoric tops. The presenter then outlines a typical pattern of a slow drawdown, a breakout, and a final drop into a low.
Labor Market Weakness and Potential Scenarios
The video discusses underlying weaknesses in the labor market, such as decreased hiring and job openings, but notes that low layoff rates are masking the full extent of the problem. An increase in layoffs could trigger a rapid rise in the unemployment rate. The presenter envisions a scenario where Bitcoin experiences a series of lower lows and lower highs, potentially leading to a final drop around October.
ROI from the Low Chart and Dollar Analysis
The video analyzes the ROI from the low chart, suggesting a potential bare market low in the first half of October. The presenter clarifies this doesn't imply a continuous downtrend until then, but rather a likely Q4 bottom. The presenter then addresses the dollar's potential trajectory, suggesting it might rebound, similar to its behavior in 2018, despite current narratives of devaluation. The presenter also considers whether the blowoff top by metals could indicate an upcoming dollar rebound.
Non-Euphoric Tops and Market Comparisons
The video reiterates that non-euphoric tops result in less severe and slower corrections. Comparing the current bear market to previous ones, Bitcoin hasn't experienced as deep of a drawdown. The presenter notes that catastrophic drops allow for more confident counter trend rallies, while slow drops make it harder to predict market movements. The presenter points out that Bitcoin's price has remained relatively stagnant for over a year, leaving many recent buyers underwater.
Supply in Profit/Loss and RSI
The video highlights that Bitcoin's bare market typically ends when the supply in profit and loss metrics cross, which hasn't happened yet. A drop to the $60,000-$70,000 range might trigger this crossover, aligning with the 200-day EMA. The presenter shares the Google and Nvidia trends as a bull case but expresses skepticism. The presenter also advises against relying solely on the Relative Strength Index (RSI) for macro trades, noting that historical bare market bottoms had lower RSI levels than the current one.
Bitcoin Dominance and Advanced Decline Index
The video discusses Bitcoin dominance, noting that the market tends to perform poorly when dominance rises above 60%. While the presenter expects dominance to eventually sweep previous highs, the timeline is uncertain. The presenter then examines the number of days since Bitcoin had a 50% drop, drawing parallels to 2018 and the dollar's behavior.
Cash vs Crypto and Final Thoughts
The video concludes by stating that being in cash has been a better strategy than being in crypto, with metals outperforming cash until the recent drop in silver. The presenter anticipates that cash will likely outperform crypto in 2026, despite potential counter trend rallies. The presenter suggests that some energy stocks or risk-off assets like gold might outperform cash. The presenter encourages viewers to check out the report on benjamincowen.com, published when Bitcoin was at $97,000, which discussed the macro regime and potential for lower highs.
