Bitcoin: The Q4 Dump is Here

Summary

Benjamin Cowen argues that Bitcoin may be entering the typical fourth-quarter decline seen in past U.S. midterm-election years. He describes the outlook as mixed: several technical indicators appear bullish, while historical market patterns and macroeconomic comparisons suggest further downside risk.

Bitcoin levels and technical signals

• Bitcoin is described as trading around $77,000.
• Cowen identified $83,000, the prior range high, as a key level. Two consecutive weekly closes below it would strengthen the case that the breakout above the range was false.
• He expects Bitcoin to test its 21-week EMA, also referred to as the 20-week moving average, since many other crypto assets and equity indexes have already approached comparable support.
• Bitcoin has often appeared resilient while other markets weakened, only to fall later. Crypto moves can happen faster than those in broader markets.
• According to the presenter, Bitcoin has been making lower highs and lower lows for roughly a month.

Historical and macro comparisons

• Cowen describes a recurring midterm-election-year pattern of three lows: a first-quarter low, a summer low, and a fourth-quarter low. He cites 2014, 2018, and 2022 as examples, with the pattern clearest in 2018 and 2022.
• He says similar first-quarter, summer, and prospective fourth-quarter low patterns are visible in gold, silver, South Korean equities, and Chinese markets, including the Hang Seng Index (HSI).
• He contrasts bullish technical signals—such as RSI, MACD, golden crosses, and higher highs—with a more bearish macro view, including Bitcoin’s historical behavior around monetary-policy rate changes.
• In past examples following September rate hikes, Bitcoin initially held up for about a month before weakening. In first-rate-hike examples, he notes that Bitcoin fell about 20% further after the 2015 hike, while the March 2022 case had not yet reached its low.
• Cowen compares Bitcoin’s recent price action with its behavior around the SpaceX IPO and a possible Anthropic IPO, though he acknowledges that the latter’s timing was uncertain. He presents this as a possible pattern, not a causal explanation.
• His broader point is that market narratives often follow price movements: bad news may be ignored during rallies, while good news may fail to halt declines.

Possible paths for the decline

Cowen outlines two broad downside scenarios:

1. A rapid “band-aid” decline: Bitcoin could fall sharply, potentially in response to crypto-specific events. He cites the 2022 FTX episode, when Bitcoin reportedly fell about 24% in two days, as an example of how quickly a selloff can unfold.
2. A staged decline: Bitcoin could fall toward the bull-market support band or 21-week EMA, rebound, and then make a later low—potentially after the midterm elections. He compares this structure with 2015 and 2020.

A possible low around $60,000 could still leave Bitcoin with a higher low than the prior cycle low, though Cowen says that path might mean a less powerful 2027 bull market. In his view, a deeper decline could set up a more substantial subsequent bull market. These are scenarios, not certain predictions.

Cowen also cautions that Bitcoin cycle lows have historically occurred after midterm elections—in November 2014, 2018, and 2022. He points to the 2018 market as an example of rallies that failed to prevent a later decline.

Portfolio and risk management

• Cowen says dollar-cost averaging (DCA) can help investors avoid buying only at highs or selling at lows, particularly in a difficult midterm-year market.
• He advises against complacency, while explicitly stating that the possibility of a decline is not a reason to panic-sell everything.
• His practical suggestion is to look for opportunities to improve a portfolio and keep some capital aside in case downside scenarios occur.
• He says Bitcoin is around day 389 from a cycle peak, compared with a cited 2014–15 bottom on day 406, making that earlier bear market a close timing comparison.
• Bitcoin’s returns in the current midterm year are described as having held up better than the average of 2014, 2018, and 2022. However, Cowen notes that markets can still reverse and mislead investors.
• He places Bitcoin in a historical “bottoming zone” when measured against the halving cycle, while emphasizing that historical patterns do not guarantee future outcomes.

Assets, indexes, and instruments mentioned

• Bitcoin (BTC)
• Total2 and Total3 crypto-market-cap measures
• MicroStrategy (company stock; ticker not stated in the subtitles)
• S&P 500 and Nasdaq
• Gold and silver
• South Korean equities
• Chinese equities, including the Hang Seng Index (HSI)
• Interest rates and monetary policy; oil and energy prices

Disclosures and sources

The video metadata states that the information is not financial advice. The presenter characterizes his views as assumptions and scenarios, not guarantees.

Presenter/source: Benjamin Cowen, Into the Cryptoverse. No other presenters are identified.