"Bitcoin Is In A Bear Market & This Is Why It Feels Different" | Ben Cowen

**Scott Melker** (0:00)
This bitcoin and crypto market feels different. And that's exactly why I wanted to have this conversation. I sat down with Ben Cowen to break down what might be the most misunderstood phase of this entire cycle. There's been no blow off top, no euphoric alt season, no retail frenzy. Instead, this looks a lot like a 2019 style top where bitcoin didn't peak on excitement, but rather peaked on apathy. In this interview, Ben walks through why bitcoin is holding up better than in prior bear markets.

**Ben Cowen** (0:30)
Normally, at this point, we would have experienced a 50% drawdown, which we haven't experienced yet. But I think the reason is because we didn't really have a lot of retail coming in and FOMOing in at the top either.

**Scott Melker** (0:41)
Why alt coins continue to bleed against bitcoin and metals.

**Ben Cowen** (0:44)
I think a lot of those investors have learned some hard lessons in this cycle. They're going to be a little bit more careful. They're going to want to make sure they put their money into something that they actually can kind of see what the utility is, and it just isn't some future promise.

**Scott Melker** (0:56)
And why liquidity, not narratives, is the real driver of what comes next.

**Ben Cowen** (1:00)
But what happened in 2019 is that bitcoin started to show weakness several months before the stock market did. The stock market continued to go up even while the valuation of bitcoin was dropping. When the stock market crashed and the Fed turned on the money printers, that's when the crypto markets got back to business.

**Scott Melker** (1:21)
If this kind of level-headed, data-driven analysis helps you stay grounded in chaotic markets, make sure that you watch this video, because this is where we focus on surviving now to your position for what comes next.
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**Ben Cowen** (3:36)
Sure. Yeah, let's do it. Yeah, I mean, look, you've been around crypto as long as I have. I'm sure we've been around the same amount of time.
It's hard to deny the similarities between the length of this cycle and the length of the last two. You know, obviously, there's no such thing as a sure thing. But when I look at a chart like this, it certainly makes me think that, you know, we had our top in Q4 like we normally do. And we're just simply in a bear market.
But, the nature of the way this potential, because it's not really confirmed, there's a lot of debate whether it's a bear market or not. You know, as of right now, you could argue that Bitcoin has dropped, you know, similar amounts that it's dropped in prior drawdowns, right? Like 30%, 30% or so. So this really isn't that different in that sense. But I think one of the things to consider is, if the top is in, which has been my base case for the last couple of months or so, if the top is in, then why was it so different? Like, why did it feel so different than the top in 2021? Why did it feel so different than the top in 2017 and also the top in 2013? And I think the reason is because you could argue that if the top is in, we actually topped on apathy rather than euphoria, right? There wasn't really a rotation into alt coins. There was not that euphoric feeling. We weren't seeing like the Picycle top get triggered or Bitcoin going to the terminal price, which is what it normally goes to before a top is in. We didn't really see all that happen. And so what I defer to is I look at the social interest. If you if you look at Bitcoin's price color coded by really social interest, retail interest, you can see that retail interest is really low right now. So the top that we experienced here in October is more like a 2019 style top, in my opinion. Yeah. So I mean, I think this cycle, we have to ask ourselves, like, why does it feel so different? Like, why did it normally we kind of end with a bang, right? Like there's some parabolic rally, everyone rotates into altcoins, and then the whole thing comes crashing down. That's not really what happened. Instead, you could argue that if the high is in for the cycle, then we topped on apathy rather than euphoria. And, you know, as far back as this chart goes, at least 2016, the only time that we had a consequential top during a time when retail was relatively uninterested was in 2019, right? We saw Bitcoin kind of top out and then slowly trend down back then as well. And there's actually a lot of similarities, I think, between the current structure of the market and what happened in 2019 So we've topped on apathy rather than euphoria. And so when that happens, you don't have the same type of selling pressure that you would have had had a lot of retail, new retail investors have joined. Normally, when you're at a cycle top that peaks on euphoria, you have a very quick 50% drawdown. So if you look at the current bear market, which is this purple pink line, it's actually holding up a lot better than all the prior bear markets. Normally at this point, we would have experienced a 50% drawdown, which we haven't experienced yet. But I think the reason is because we didn't really have a lot of retail coming in and foam mowing in at the top either. So if you actually compare the current hypothetical bear market, I'm not looking to make anyone upset, but if you compare the current hypothetical bear market to not the one in 2022, 2018 or 2014, but if you actually compare to the one in 2019, it actually tracks a little bit better. So this is that chart, right? So the orange line is the current bear market potential, and then the blue line is what we saw happen in 2019 So I kind of think that this is what is happening right now. Also, there's other similarities as well between the way that this cycle topped. If the top was October, which again has been my base case, then it topped about two months before quantitative tightening ended, before the balance sheet of the Federal Reserve started to go up. So if we just simply overlay that, you can see that the balance sheet of the Fed started to go up in December. And if you go back to 2019, you'll notice that the 2019 top occurred about a month or two before the balance sheet of the Fed started to go up as well. So there's a lot of similarities in like the way that it topped, right? There was just, we didn't top on euphoria. We just topped on relatively lack of interest. And so what I kind of see happening is I see a slow bleed into the summer with slightly lower highs and slightly lower lows, right? That's kind of what happened in 2019 It wasn't a massive capitulation. It was just a series of slightly lower highs and slightly lower lows. And I think that will likely last into the summer of 2026