Bitcoin (CRYPTO: BTC) slipped below $70,000 this trading week, Ethereum (CRYPTO: ETH) fell 4%, while XRP (CRYPTO: XRP) held near $1. According to analyst Benjamin Cowen, this could be the potential final capitulation phase before reaching a four-year cycle bottom.
In his latest Into The Cryptoverse analysis, Cowen highlighted Bitcoin's historical tendency to experience sharp selloffs following U.S. midterm elections. He pointed to November 2014, 2018, and 2022, when Bitcoin entered its final bear-market decline before eventually establishing a cycle bottom. Cowen believes the current downturn could follow a similar pattern, with a potential bottom emerging in December or early January.
He noted that Bitcoin's failure to hold $83,000 on weekly closes confirmed that its earlier breakout was likely a bull trap rather than the beginning of a new bull market. Historically, such failed breakouts have triggered rapid declines as investors abandon successive support levels.
Could Bitcoin Crash Another 30%?
Cowen warned that Bitcoin's 200-week moving average may not hold, citing historical declines of roughly 30% below the indicator in 2015 and 2020. A similar drop could push Bitcoin toward $40,000. He highlighted several indicators suggesting the bear-market reset remains incomplete:
- Realized price: Bitcoin remains above its aggregate cost basis.
- MVRV Z-score: 0.565, versus below zero at previous bottoms.
- On-chain risk: 0.21, compared with historical lows below 0.10.
- Social risk: 0.07, signaling retail interest near late-2018 lows.
December Capitulation Could Set Up Bitcoin's 2027 Recovery
Cowen identified the Fed's December meeting as a potential catalyst for Bitcoin's final capitulation, drawing parallels with its 2018 cycle bottom. He argued that a hawkish Fed could trigger further selling, potentially resetting on-chain valuations and supporting a stronger recovery in 2027. Conversely, a higher low could leave unresolved market excesses, raising the risk of another downturn around August or September 2027. Bitcoin holding its 200-week moving average through year-end could strengthen the bullish case.
