Bitcoin Q4 Dump by Benjamin Cowen

of tracking what we've seen happen. A lot of these midterm years, right, like expecting a 10 to 20% drop. The NASDAQ's already down 10%. Right? The QQ was down 10%. Now, so, you know, I think between, especially as it gets closer to that 20% for sure, I think right now we're still in this phase of like, you know, every day, it can drop so much so everyone's kind of fearful to buy. But if you're just buying monthly and you bought, say, a month ago and you're a little nervous and you don't want to buy into a falling off, you could always delay it by a week or two until after the midterms if that, you know, if that'll help. But my general thought process for the indices is not, is just not to overcomplicate it too much and to just kind of continue on with the same game plan despite the corrections that appear. Okay. Thank you. Ghost, are you there? Did you want to talk? Hey, Ben, thank you for having me. Yeah, what do you have? Yes. Yeah, so I had a quick question. I mean, so basically, if you guys take a look at a yearly candle last year's Bitcoin closing candle was 87.5K. So we recently rejected that key key resistance and my base case until we don't reclaim that key key area, I wouldn't flip bullish on Bitcoin. I'm still high time frame bearish. I think there's a high probability the low is still not in. But I just want to get your views on that specific last year's closing candle, 87.5K. Yeah. I mean, so yeah. Now, I've talked about it a few times because the the yearly open and midterm years often acts as resistance. The only difference this year was that it acted as resistance pretty late in the year. Normally, if you retest the yearly open, it's like right when the year starts like a week, like a few weeks after the yearly candle starts, like Bitcoin will drop and then rally back up and get rejected by the yearly open and then go down. This time, you know, it did it much much later in the year, which might be an artifact of it being a more apathetic top. Apathetic tops are notorious for leading to bear markets with more fake outs, right? And that is that is a fairly common thing. As far as like where Bitcoin goes from here, you know, whether it's a low or low or a higher low, I mean, obviously, I've talked a lot about things like the real-life price and that kind of, you know, those sorts of things. And I think that it doesn't make sense for me to just ignore it. I'm not sure if it's going to happen this year or not. You know, I mean, I with a higher high, I'm not sure there would be a lot of buyers that try and step in in the low 60s if we get down there. But I think in certain tail risk scenarios, the real-life price and the balance price have got to come and play, right? I mean, they at least have to be part of your risk assessment in the markets. And you know, if that doesn't happen, it doesn't mean we can't have a bull market, right? I'm not suggesting that. But it is, it's one of those things where like, in my opinion, if I'm just being honest, I think we eventually do trade below the real-life price. I just don't know if it's going to happen this year, right? Like it, I'm not sure yet if it happens this year or if it happens like, you know, in some way. What's the price been right now? I don't know. I don't know that please. That's like the mid 50s, I think. Like 54. I think it's like 54. My guess is that we eventually trade that level. I just don't know at this point if it's if it's going to happen this year or if we kind of delay it until there's, you know, a much larger drawdown in equity markets. I think the timeframe, no one knows when this stuff's going to happen, I think if it's going to happen, it's going to happen in the next month or two. And if it doesn't happen in the next month or two, then it probably won't happen for like, at least six or eight months, right? Because by the end of the year, I think you're just simply going to have enough people that are bearish or going to turn bullish because they're going to look at it and be like, all right, well, the midterm year is over. It's the same thing as the July low, right? Like if you think back when we talked about the February low and the summer low, every time you come into one of those lows, a lot of bears become bulls and it and it sustains the market for a few months. So for Bitcoin to go lower, the timeframe for it to go lower would be over the next like one to two months. And if it whatever it's done by then, I think there's going to be enough bears. They're going to flip back to being bullish for 2027 and then it should lead to a sizable rally into early 2027. That's kind of how I think it's going to play out. Thank you. Thank you Ben. I mean, my base case from last year was like I was assuming like Bitcoin was going to have the first back-to-back red yearly candles in a row. And yeah, I'm sticking to that until invalidated. But yeah, those were my comments. Thank you for having me, Ben. Yeah, I think it's reasonable. And I think to, you know, the yearly candles, I know a lot of people kind of came into this year thinking that like a red yearly candle last year, I mean, you couldn't have one this year. But I mean, just in terms of if we were not to, you know, cherry pick exact dates, right? This is a fairly normal bear market for Bitcoin. And I mean, obviously you could we could get into the argument of it, okay, maybe it's not a bear market if the if the low is already in and we don't go lower. But regardless, we're seeing a lot of weakness right now in the markets. And that's pretty similar to what we normally see in Q4 of midterm years. And there's always something, right? Like there's always something that, you know, most people aren't predicting that ends up being the reason why we go down or at least the perceived reason for why we go down. And I just, you know, this time this time just really hasn't been any different. So I would look for, you know, I would look for the strength for Bitcoin to start showing back up near the near the end of this year and then going into early 2027. That is where I think you'll see a lot of bears become become bulls again. Great. I have a final I have a final question. Sorry, sorry about that. Yeah, go ahead. Do you do you think so? I've seen a lot of people a lot with a lot of bullishness in all of these new clouds. And even after this recent massive drop on new clouds, like there's a lot of people still delusionaly bullish. So would you think if the for example, companies like iron, which I expect more downside, do you think that could even like drag more Bitcoin and offend like affect more that sentiment and push the price lower? Maybe, but I think didn't wasn't iron one of the companies, the companies that basically pivoted to eight, you know, they they pivoted AI, right? Largely and that was not like I think a lot of the a lot of the companies that were more into the crypto space, a lot of the ones that ended up doing well, like really well in 2024 and 2025 were the ones that pivoted AI. So I like yes, it's true that if if the AI companies were to start getting larger corrections, I don't imagine in the short term, it would be bullish for Bitcoin, but I want to provide like an example for why there are there are scenarios here in my mind that AI stocks dropping would actually lead to the bullish Bitcoin view. So and I'm going to talk about this at the at the conference. I'm hosting in just a few weeks and I've talked about it before, but the general premise is this, right? Assets like like Bitcoin do do a lot better under loose or monetary policy, right? Like we've seen that before, they do a lot better under loose or monetary policy than tighter monetary policy. This is a hallmark of of you know assets that are further up the risk curve. So the reason why monetary policy has been so restrictive for so many years is because of AI, right? Like it's because of all the capital expenditure in the AI sector and it's because of all that in the short term AI is inflationary in the in the short term just because of all the demand and and the cap and the expenditures. But over a longer period of time, the same forces that are inflationary today become disinflationary tomorrow. Like once we kind of cross that threshold and I don't know exactly what point we cross it, but at some point it becomes disinflationary. Now the market will like price that in before it's obvious. So whenever AI stocks start to drop in the short term, it's just a risk off move and it's not good for Bitcoin. But where Bitcoin would benefit is that it would allow for loose or monetary policy. So this is what I've talked about all year and I think it's actually going to play out. This is exactly the playbook from 2018 and and look at what the Fed did in 2018. The Fed raised rates in September. Bitcoin started dropping about a month and a half later. The Fed did not raise rates at the meeting around November around the midterms. And then they raised rates again in December. But what happened in December is that the Fed released the SEP, the summary of economic projections and in that SEP, they were projecting two more rate hikes in 2019, right? Which is arguably one of the reasons why crypto was so spooked at the end of 2018 because we had already been through rate hikes for like three years. They started hiking rates in December of 2015. They hike through 2016, 2017. And and then they hiked through 2018. And then we were looking at more rate hikes in 2019. And that was around the time that Bitcoin just plunged, you know, like 40, 50% in just a few weeks. And what happened is the NASDAQ and the stock market also dropped. So the rate hikes that were priced in at the end of 2018 for 2019, those rate hikes never actually happened. And so what ended up happening was there was all this fear that gripped the crypto community over the rate hikes that were coming. I mean, there was some other things going on too, right? There was the, you know, the, the, the, um, the wars, right? The protocol wars as well. I'm not pretending like there were no other things going on. But when those rate hikes in 2019 got priced out, that led to the, to the bullcase for Bitcoin. And so what happened in late 2018 was a drop in, in, in equity markets, which is what I think is happening now. Like I don't, I am not of the opinion that the current drop in, in equities is necessarily the big one. I think there's going to be another rally after this Q4 low is printed. And, and then on the other side of that, well, you know, we'll talk about what the markets look like, but there could still be, there could still be, you know, plenty of runway there. My argument right now is that yes, you're right in the short term, AI stocks going down is bearish for Bitcoin. But over like a six month timeframe, if those stocks going down, calls some of these rate hikes to get priced out next year, then that would actually cause Bitcoin to likely get reprised back, you know, back up. Grant, how are you doing? I'm not sure if he's there. But hopefully, hopefully that answered your question. No, thank you. Thank you, Ben. Really amazing insight. Thank you for your feedback. Be sure to. Yeah, absolutely. It's always good to, you know, get people up here to ask some of these questions and then it, I mean, it also makes us think a little bit too. And I don't mind, I certainly don't mind people like pushing back on any of this stuff, right? These are just, they're my views and my views are sometimes wrong, right? As we know, they are sometimes wrong. But that's my story and I'm sticking to it, right, until, until proven otherwise. So I think that, you know, the cycle might just end up playing out like it always has. And then we'll sort of develop the narrative for why it did, but it seems, you know, it still seems pretty straightforward to me, as it stands right now. Let me see if anyone else wants to come up and grant. If you can hear me, feel free to, feel free to chime in. All right, I just added someone, all right, Palmer, can you hear me? Yeah, you are coming soon, loud and clear, Ben. Hey, what do you have? Have I spoken to you before on here? Yeah, it's that's hurt me a little bit. We've spoken at least three times now. I thought, I thought we had, and I mean, I don't, I don't remember everyone's names, but I, I thought I recognized your name, but I mean, you have to remember, I haven't done a space in like, like four months. It was mostly comedic, don't worry. How are you doing? I'm doing, I'm doing Vale. So in terms of like the, the Instagram scheme of things, in terms of all the markets, I think that this has just been a long time coming, of us out saying like gigantic mouthful. You just mean the drop has been a long time coming. Yeah, sorry, I tend to talk for a very long time, but yeah, I think, I think that every one who he has been acutely a better market, he has been expecting, if this is not Z-drop, maybe Z-Poliminary-1, whichever one it is, I think that this drop in equities, in commodities, crypto has just been a long time coming. This is, this is, so the preliminary drop or Z-drop, which have been fun at these? Yeah, I mean, it's no one ever really knows, right? I mean, the market, market has a way of fooling everyone at some point or another. And I think the biggest thing the market did this...