 ▲ Bitcoin (BTC) / ChatGPT-generated image |
Bitcoin (BTC) has shown unprecedented volatility and managed a short-term rebound, but historical bear-market data warns of a deeper correction following a false rally likely to form in March.
Veteran trader Benjamin Cowen, in a video posted on his YouTube channel on February 6 (local time), compared Bitcoin’s current trajectory with bear market cycles in 2014, 2018, and 2022. Cowen noted that “bear markets tend to confound both optimists and pessimists alike,” adding that at a stage where prices have fallen more than 50%, investors must weigh both the potential for a technical rebound and the risk of further downside.
Looking at past cases, Bitcoin has typically formed a low in early February, followed by a temporary rise in March before declining again in April and May. In 2018, for example, Bitcoin bottomed on February 6 and rallied strongly into early March, only to form a lower high and continue its downtrend. Cowen cautioned that while a rebound testing resistance could emerge in early March this cycle as well, it should not be interpreted as the definitive end of the bear market.
Macroeconomic indicators and on-chain data also support a cautious approach. Cowen referenced the four-year cycle of the S&P 500, noting that lows in traditional financial markets have most often formed in May or October. Accordingly, he assessed that Bitcoin’s true bottom is most likely to appear in May or October this year. He further projected that during the summer months of July and August, diminished market interest could lead to a dull trading environment with sharply reduced volatility.
Among the market’s potential risk factors is the financial fragility of companies that entered at market highs. With some firms holding average entry prices above $100,000, it may take considerable time for the risk of their potential defaults to be fully reflected in the market. Cowen explained that rallies during a downtrend tend to unsettle bears, while subsequent declines frustrate bulls, emphasizing that the most important investment strategy this year is to survive into the next bull cycle without losing a significant portion of one’s assets.
Bitcoin is expected to remain highly volatile in the near term, likely forming a lower high in early March followed by another downturn. While the current Advanced Sentiment Index indicating extreme fear may signal a short-term rebound, a clearer confirmation of a bottom is needed for a long-term trend reversal. This is a time for investors to maintain a conservative stance and closely monitor market developments until volatility meaningfully expands again in the fourth quarter of 2026.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The publisher assumes no responsibility for any investment losses resulting from decisions based on this content.