 ▲ Bitcoin (BTC) |
Bitcoin (BTC) has entered a period of heightened volatility driven by macroeconomic uncertainty, repeating a historical pattern in which it forms a peak in early March after reaching an all-time high and subsequently undergoes a correction.
Benjamin Cowen, host of IntoTheCryptoverse and a veteran trader, stated in a video uploaded to his YouTube channel on March 7 (local time) that Bitcoin’s recent price action closely mirrors past four-year cycles. He cited a technical pattern in which Bitcoin recorded peaks in early March during previous U.S. midterm election years—March 3, 2014; March 5, 2018; and March 2, 2022—followed by corrections. This year, Bitcoin similarly marked a high on March 4 and has since faced continued selling pressure, which Cowen argues is not mere coincidence but the result of a precise market cycle.
The Federal Reserve is currently facing a checkmate-like scenario, tasked with defending against two simultaneous weaknesses: surging energy prices and a weakening labor market. Despite a decline of 92,000 in nonfarm payrolls signaling a clearer recessionary trend, rising oil prices have intensified inflationary pressures, limiting the Fed’s ability to aggressively cut interest rates. Cowen explained, “The Fed can defend against one weakness, but it cannot fend off two at the same time,” adding that such uncertainty is triggering a distribution phase and price declines in risk assets, including Bitcoin.
Detailed labor market indicators are sending far more severe recession signals than headline data suggests, further deteriorating Bitcoin’s supply-demand environment. Job openings and resignation rates have fallen sharply, with the number of available jobs per worker dropping below one, indicating that the excess liquidity and optimism that once fueled market rallies have vanished. Cowen warned that if the labor market enters a nonlinear collapse phase, downward pressure on Bitcoin could intensify.
Understanding how Bitcoin’s four-year cycle operates within the broader business cycle is essential for shaping current investment strategies. While some optimists anticipate a soft landing similar to 2022, the deleveraging process appears prolonged, and the stock market, currently in a plateau near its highs, is likely to follow Bitcoin’s early signs of decline. Cowen added that because Bitcoin sits higher on the risk curve than equities, it may serve as a leading indicator of the market’s future direction.
Bitcoin is currently in a technical distribution phase, making further declines or expanded volatility difficult to avoid. The longer the Federal Reserve delays decisive policy action, the more market anxiety is likely to grow. Investors should carefully consider the depth of corrections suggested by historical patterns. At this critical inflection point for the Bitcoin market, the Fed’s policy moves and changes in macroeconomic indicators are expected to serve as key variables determining the next trend.
Disclaimer: This article is intended for investment reference only and we are not responsible for any losses incurred based on it. The content should be interpreted for informational purposes only.