Bitcoin Black Swan CONFIRMED! (How Low Can We Go?)

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A black swan to the entire crypto market has been confirmed, and Bitcoin is absolutely crashing. Now, we must acknowledge exactly how deep this pain could actually go post midterm election, as we're on the eve of a Federal Reserve interest rate hike over the course of the next few months. The markets are already terrified from an AI stock unwind, and Bitcoin's momentum gauge has now turning red. Now, this is angling prices cascading down to the $60,000 region for Bitcoin, but in today's video, I'm actually going to be compiling all of the information, the expected interest rate hike. We're going to also look at post midterm election drawdowns to come up with the average drawdown that we should expect to see in Bitcoin, as the market cap has grown exponentially from the 2022 timeframe, but there is still the likelihood of pain and destruction on the charts over the course of the next month or two. That red Bitcoin momentum gauge we're talking about is the weekly MACD on Bitcoin. Bitcoin headed lower says the technical indicators are flashing clear red signals, a weekly MACD rollover with a bearish cross. Josh Taylor, founder and lead contributor of analytics firm Seven Key Financial. Now, the Bitcoin price, if you're backed up looking at it from the long term, doesn't look too bad, but internally we're looking at a very key indicator, the MACD, which indeed is showing the moving averages have crossed over each other, and we're seeing a fresh red print on this momentum indicator. Now, obviously, there's a lot of blame that we can throw one way or the next, but the real black swan that's taking hold of the markets right now cannot be denied, folks, cannot be denied. Jensen Huang just could not keep it down. And honestly, you know what? Everyone gets upset when an Asian guy gets some motion. There's many people inside of Nvidia that are reported to be asking for Jensen's return. This is going to be a messy situation, but the real thing that we have to look at is can Bitcoin momentum return back to the upside this year? And with that weekly MACD indicator pointing red, it is going to be very difficult. And beyond all the freakouts that are happening on the X timeline and on mainstream media over the markets, I'm watching three different things. We have an AI unwind happening currently that obviously is being led up by the Jensen resignation from Nvidia. But we have the post-midterm election blues that have historically played in to Bitcoin's downside, plus interest rate hike expectations that are largely, in my opinion, being priced in right now. Bitcoin price post-midterm elections is always bearish. And to really get a grasp of what I'm expecting here, I'm going to look at the post-midterm Bitcoin drawdowns. And this is data taken from the actual election day close 2018, 2022, and our current 2026 ugly scenario. Now, in 2018, on November 6th, the midterm election closed that trading day around $6,440, but we ended up finding our bottom around 3,185 on December 15th. And that was a 50% drawdown through roughly six weeks timeframe where Bitcoin's market cap was sitting around 100 billion to $110 billion level. November 8th of 2022, we had an $18,500 close where we ended up falling down to the bottom at $15,480.

This included the week of FTX unwind. And this drawdown was only about 16% to 17%.

Market cap from Bitcoin at the time was sitting at around a $350 to $400 billion range. Now, what we're going to be doing is taking the average of these two post-midterm election legs to the downside, and we end up with around 34%.

But this is where things get interesting. We have to compare the difference in market cap sizes to our existing market now, because it's much different. Even with the drawdown, we're sitting at a $1.3 trillion market cap, no longer in the billions or hundreds of billions of dollar mark. 2022's market cap for Bitcoin was already three to four times larger than the size of the market cap in 2018 So in this data, there is some historical precedent set for a larger drawdown expectation for the end of the year post midterm election. The real key is combining this data to find out what the average expected drawdown would be in this new environment. Not only is the market cap of Bitcoin bigger, but we have institutional demand. The market has become much more liquid and a lot less retail involvement going on now. Now, the last midterm was November 3rd to the 5th of 2026, and the election window had a price action where we were in the high $70,000 to low $80,000 range. And if you apply a size-adjusted expected drawdown from this moment, you end up with a very interesting number, and a number that's quite important for me and my expectations on how low can we go in this ugly environment. That expected ratio of drawdown ends up being between 22% to 28%.