Bitcoin's Next Cycle Top Revealed; When Does 'Altcoin Season' Start? | Ben Cowen
Summary
Bitcoin Cycle Analysis: Ben Cowen predicts a cycle top for Bitcoin before the end of the year, potentially setting up for a bear market in 2026, following historical patterns of cycle tops in Q4.
Market Patterns: Historically, Bitcoin experiences a local high in August or early September, followed by a low in late September or early October, with potential breakouts occurring in October.
Bitcoin Dominance: Bitcoin dominance is expected to rise, with liquidity flowing back to Bitcoin before potentially moving into altcoins, suggesting that an altcoin season may follow this dominance rally.
Ethereum Performance: Ethereum has shown significant gains, attributed to its regression band pattern, with expectations of another rally to all-time highs after a short-term correction.
Investment Strategy: Cowen suggests an 80/20 portfolio allocation favoring Bitcoin over Ethereum, with a focus on Bitcoin's dominance and potential for another rally.
Market Sentiment: Despite Bitcoin's substantial gains, interest remains muted compared to previous cycles, possibly due to diminished returns and altcoin underperformance.
Macro Factors: The discussion highlights the impact of monetary policy, with potential Fed rate cuts influencing market dynamics, though Cowen views these as secondary to Bitcoin's cyclical behavior.
Future Outlook: Cowen anticipates a bear market in 2026, consistent with historical midterm year patterns, but suggests this could present a buying opportunity for long-term investors.
Transcript
I do think we will have a cycle top before the end of the year, uh, which will then set up the 2026 bare market. If Bitcoin is at 130K, if it's at 130K or 140K and it's December, that's probably it, right? If it's at 180K, that's probably it. I think this cycle for Bitcoin has essentially done what it's always done. The main reason it feels different for people is because altcoins have lagged a lot. Ben Cowan joins us once more. He is a founder of into the cryptoverse. He's got a great platform, very interesting YouTube channel. Check out his work link down below. We'll talk about his outlook on Bitcoin, Ethereum, the crypto markets, uh the major factors driving crypto right now, and uh the breaking news that may impact investors decisions. Welcome back to the show, Ben. Good to see you. Last time I had you on was way back in May, so it's been a while. Good to catch up. Yeah, it's always good to see you, David, and I'm I'm happy to be here on the channel once again. Since the uh summertime, early summertime when I spoke to you last, uh much has changed for crypto. Ethereum, which was once a lagard, has now skyrocketed. We'll talk about that. Um let's talk about Bitcoin first, the biggest crypto. Uh you've mentioned on my show before and on your own show as well that September the fall usually has historically been a consolidating month, but Bitcoin's added double digits since the beginning of um August. Um sorry, not double digits, it's it's added uh like something like yeah close to 10%. Um so we we'll talk about why. Yeah. So, Bitcoin right now, I mean, it it technically speaking, um, we are seeing a so far it's been a positive month. We also saw 2023 September and 2024 September was also slightly green as well. Uh so so basically what happens with Bitcoin historically is it it'll put in a local top sometime in August or early September and then it'll find a low in September and sometimes the low will come in early October but that's the general trend right that's the general trend and so you know technically August was a red month but also Bitcoin put in a new all-time high in August right so it went up for the first half of August and in September. So far, Bitcoin has been doing quite well. Uh but it also put in a new low uh but you know it went lower than where it had been basically since you know June July, right? So it's a very common pattern that Bitcoin has. If you go back and look at basically all prior post election years, you'll find a low or a high in August or early September and then a low kind of like late September, early October. Here you see it in 2021. You'll even see it in 2020. A high there in August, and then a low forms in September. This pattern right here actually looks really similar to what we're going through right now. Um 2017, again, another high in August and a low in September. And then in 2013, you had uh this high right here in August, and then a wick down in like late September, early October. So, it it's generally following the blueprint, right? that you get a high in August or early September and then the market cools off for a few weeks uh a consolidation phase and and you can even see how similar this move is to what we had last cycle where you have this kind of capitulation low and then kind of you go up and to the right and then you pop up into that August high go sideways and then you go down and then you just kind of consolidate there just above that 20week moving average, right? It's it's basically the same thing uh playing out. And so to me, this isn't really different than what it's historically happened. We normally find a high in August. We normally find a low in September. So far, it seems to be playing out generally how it how it normally does. I mean, so far, I mean, the consolidation period for Bitcoin in in the third quarter will typically last until kind of like the end of September. If you even if you go look at at all the prior years this cycle, you can see that the breakouts did not happen until October, right? you have October of 2023 and then last year it was actually late October, early November. This is a common pattern. I mean, we've seen this many, many times, many other times as well in 2020. The breakout was also in October. Uh, so I I kind of think you're you're you're looking at something very similar where you have these, you know, you have these breakouts, but the breakouts don't normally happen until October. So, I would not expect new all-time highs. I mean, at least for the the rest of September. Hopefully, we can get one as the year goes on. Is it normal though for uh Bitcoin to rally into the end of the year? The Santa Claus rally is talked about a lot for the equities markets. Um what about for for the crypto markets? Yeah, usually it does. Uh the the one thing we have to be aware of for this year is that market cycle tops for Bitcoin, this kind of gets in discussion of of the whole four-year cycle. Market cycle tops for Bitcoin tend to occur in the fourth quarter of the year. So you have Q4 of 2013, Q4 of 2017, and then Q4 of 2021 where the actual top occurred. So so far this cycle, you know, we've we've seen Bitcoin continue to go higher even into into the following year after Q4. But when you look at the ROI of Bitcoin, say like as measured from the low each cycle, right? Whether you take that low, this low here, right? each of these lows. If you measure out the ROI from the low uh for Bitcoin and you just kind of plot them over one another, you can see we're we're getting close to, you know, potentially the end of of the cycle. So, I I would say that, you know, once we get out into Q4, I I don't think investors should be complacent, right? I don't think they should be complacent. I I I think if we do get a breakout, we need to just be aware that at some point uh we likely will put in a a cycle top for this cycle. Uh see some downside in 2026 and then just repeat the whole thing again. So and also and I think we've talked about this before as well. Um it does very much appear like we are having once again diminishing returns. Every single cycle seems like we drop down a little bit uh in terms of in terms of the returns for Bitcoin. So, a lot of times people think that like this cycle is different because the the returns haven't been as great for Bitcoin, but it's just an artifact of of a very high a much higher market cap and the need to have exponentially more volume to move the price. Uh, correct me if I'm wrong, but I believe you said in the past Bitcoin dominance could top around 60. I mean, um, you're sort of right. It topped around 65 and then it just kind of fell back. We're now below 60. Um, so walk us through uh why you initially thought there was a resistance level around 60 and then ultimately where it's headed from here because it has been dropping ever since June. Well, way back when the reason we talked about 60% was because that was the 618 fib extension. I mean, that wasn't even the original reason. The original reason was just I've seen Bitcoin dominance in prior cycles go to, you know, 70 80% and whatnot. Uh, so it made sense to assume that dominance could at least return back to 60%. But if you look at last cycle, we saw dominance return to the 618. This cycle it hit the 6 618. That's where it got a correction. But after it got that correction, I actually flipped bullish on dominance again uh back in late 2024. And the main reason was because we we had not yet seen Ethereum go to its regression band, right? And and normally in order for dominance to really top out, ETH, Bitcoin, the valuation of Ethereum against Bitcoin has to bottom. And the issue in December or sorry, in November, December of 2024 is that Ethereum had not gone to its regression band yet, right? Like it was it was still up here. And so, and if you just kind of overlay, right, if and I I mean, you can you can always stop me if I'm if I'm getting ahead of ourselves, but um but if you look at ETH Bitcoin, you can see normally it bottoms out whenever Ethereum goes to its regression band. And so, the reason why it sort of made sense to flip bullish on dominance and I I gave a target actually when we were at 60%, I said the next major level for us to to hit would be 66 considering that Ethereum had not yet gone home. But then Ethereum went home, which is the regression band. That's where ETH Bitcoin bottomed uh and we've seen, you know, we've seen Bitcoin dominance fall uh in the short term. I think what we're about to see though is the final rotation of the cycle back to Bitcoin. Uh this is a very common thing. It should not be considered like a contrarian view in my opinion. If you look at at all prior post having years for Bitcoin dominance, this is essentially what happened. In fact, last cycle, dominance found a low basically right around this level and then it went back up into its final rally, right? You can see that. And then in 2017, in August, September, it found a low and then went up into its final rally. So, I think that Bitcoin dominance right now is finding a low and I think it's going to go up here as we get into uh as we get into the month of October. Crypto has been heating up all summer. Bitcoin has continuously surpassed new all-time highs while Ethereum gained more than 50% in just a few weeks since the beginning of the summer. Is it altcoin season? What's going on? 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Go to the link in the description or scan the QR code here to learn more today. And just stepping back into your broader cycle theory approach here. Where are we right now in Bitcoin's overall larger uh cycle? How do we compare right now to 2017 uh 2021 or even 2013? I mean, look, no matter how you measure it, if you want to measure it from the ROI from the low, we're getting pretty close to the end. Again, all prior major cycle tops occurred in Q4. If you measure it from the if you go ROI peak to peak, you can see we we've got a little bit longer, right? This would suggest we got a little bit longer, but not again Q4 is not the time to get complacent about it. Um, and then if you measure it from the having, you can see we're getting, you know, we're getting pretty far along. So, you know, I think this cycle for Bitcoin has essentially done what it's always done. The main reason it feels different for people is because altcoins have lagged a lot, right? Like altcoins haven't really kept pace. And so that's why this cycle doesn't feel the same as as prior cycles. But, you know, Bitcoin is is doing what it's always done. If history is an indication, you could see another rally uh in the fourth quarter, at least some point in Q4. But I do think we will have a cycle top before the end of the year. Uh which will then set up the 2026 bare market. Right? Again, all prior midterm years for Bitcoin have been bare markets. 2014, uh 2018 and 2022, right? You can see this is 2014. This is 2018. Here's 2022. And you know, sort of the the rhetoric right now is that institutions have changed this and that it won't happen again. And I I mean I'll be the first to say that, you know, anything's possible, right? I'm not going to to say that it's impossible. Usually those bare markets happen from places of euphoria uh and and and places where altcoins are are going parabolic. We haven't really seen that. Um so, but who knows? Maybe we will, right? Maybe we will see that in the next few months. I don't know. Um, but I do think by the end of the year if if Bitcoin is is is if if people are fomoing into Bitcoin, if it if it feels a little bit more euphoric and whatnot, it might be time to sort of think about, all right, things might go south in in 2026, but it'll likely just be, you know, an opportunity for for long-term investors to to buy Bitcoin cheaply again, just like they were able to in, you know, 2014, 2018, and and 2022. So, um, I think we're getting near the end of the cycle. I I still think that there's still room for Ethereum, you know, to run back up to all-time highs. I I think you will see that. But in the short term, I think the the the most obvious short-term move right now is that dominance, Bitcoin dominance should go back up. So liquidity right now should flow back to Bitcoin and then Bitcoin should try to use that liquidity to try to push back up hopefully near those highs again and hopefully can put in another all-time high. But that's what that's how I see it playing out. I'm going to get your cycle high in just a minute. So stay tuned for that. Uh but in the past two bull cycles 2021 and 20 um late 2017, the Bitcoin dominance fell dramatically uh before Bitcoin topped and then we saw a bare market thereafter. So, in other words, uh we had to have a really big capital flow into the alt space, uh you know, FOMOing at the top from the retail space, if you will, before Bitcoin topped. Um, and you're not saying that's going to happen this time. Well, no. I I So, this is a a common thing that I think people get confused by. I I'm not say I'm not saying it's not going to happen, and this is something that people have misunderstood me for like the last several years. A lot of times when I say that that Bitcoin dominance is going to go up, the often response is, "Oh, so Ben's saying there's never going to be an alt season." The the thing about alt season is is that timing is really important, right? There's people buying alts 3 years ago that would have told you alt season was around the corner and then we saw dominance go up for three and a half years. What I'm saying is that the alt season calls right now are in my opinion still premature. And when I say alt season, I don't mean their USD valuations, right? like alts can go up against the US dollar if Bitcoin's going up. My point is that every like look at the last two alt seasons. All right, you can see them pretty clearly right here, right? So, let's just highlight them so that there's no, you know, so that I'm not being ambiguous in in any way. I'm trying to even find the um the drawing tool on here so I can show you what I'm talking about. But basically, um I don't even know where this stuff is anymore. Uh while you're doing that, my my Yeah. I I think my broader question is do alts need to rally a lot more before we see Bitcoin top at this cycle? But um I I'll let you answer that in your way. Yeah. Yeah. But look at look at the last two major alt seasons, right? You had that one right there in 2017 or 2018. 2017 2018 and then that one right there, right? You see those two, but notice that both of them when they happened, it was it what preceded them, right? What preceded them was Bitcoin dominance dropping and then getting one last rally. Right. I see. One last rally and then it dropped. Now, now look at the cycle before, right? Dominance was dropping and then it got one last rally and then it dropped. So, right now we're seeing the same thing, right? Dominance has been dropping. What I'm suggesting is that dominance is forming a low to go into the final dominance rally, right? So, I'm not saying there can't be an alt season. What I'm saying is that liquidity right now is likely going to flow back to Bitcoin. And the reason I say it is if you look at you just look at monthly returns uh for for Bitcoin dominance, you'll find that September is often the month where dominance reverses course. Okay? So, look right here at this at this September. Now, look at at 2020. You can see dominance found a low right around in September. Look at 2017. In September, dominance found a low and it had that final rally. And if you go back and look at a lot of these years, look at 2022, same thing, right? Dominance found a low in September. There's so many examples where dominance finds a low in like around that Q3 time frame and then goes up after it. Or the reverse can also be true. If dominance is going up into September, then it typically reverses course and goes down after it like you saw in 2019. So my point here is to say and and also even in 2021 look dominance found a low in September and then it got its final rally up before it then went to its its low. So my argument right now is not that you can't have alt season. It's just that the path to get there is important and it's often overlooked. And you know, I I and the reason I feel, you know, so strongly about this, right, is because we've basically just gone through 4 years of people screaming that alt season is around the corner. Uh and and sort of fading Bitcoin dominance and then dominance to remind them that, hey, Bitcoin is the reason we're here, not your altcoin. So my my point is to say it's not that it can't happen. It's just that in the short term, I think the most likely outcome is dominance first goes up and then it goes down. Uh, well, I'm gonna ask you the very annoying question. Is altcoin season around the corner then? Because according to your analysis, if Bitcoin dominance goes up a little bit more of repeating the last couple cycles, if it goes down, that should signal the return of all coin season. No. Yeah. I mean, it very well could, but I I don't think we're at that part of the cycle right now. Like, I I'm not saying it's not I'm not saying it's not coming. It's just that we're not at that point of the cycle yet. I think the first thing to do right now is for dominance to go back up and hopefully dominance goes up on a Bitcoin rally, right? If it can go up on a Bitcoin rally, then that would strongly support the idea of of an alt season later on this year. Um there are examples in history where low cap things top out or sorry where where blue chip dominance tops and then the market crashes where you don't get that final move by you know the the penny stocks or whatever. Um but if if this is going to play out how crypto has always played out let's just forget about all the other markets and all the other comparisons you can make. If it's going to play out how it how it's historically played out, then the expectation would be that first liquidity goes back into Bitcoin and then after that it has the opportunity to go back into alts. So, if you're going to have an alt season, it probably won't happen until after the next Bitcoin dominance rally. Got it. Uh, what is the Bitcoin cycle high for you? You said it might top out by the end of the year. I mean, I I think my guess is that it does not go above 200. Um I I think that diminishing returns is very much a thing. You know, 124 is kind of an interesting number because um which is where Bitcoin already went. Uh the main reason it is it I and I don't know why I even noticed these things, but like I I just remember in 2013, you know, Bitcoin topped out at like 1.24K um or so. Like it was it was right around 1.24K, I believe. That that that high. Yeah, basically right around that level. Uh and then but what's really interesting is in August of 2020, Bitcoin found a local top at 12.4K, right? And then you know August 2025 124K. So you could argue that the reason why it was the cycle top in 2013 was because it happened in Q4. In you know in 2020 it did not happen in the fourth quarter we had and it was also not even the post having year. So, what I think is is you'll likely have another move by Bitcoin to the upside and I could see it topping anywhere from that 124 and it could go as high. I mean, it could go as high as as you know close to 200, but um I think I I I think it it would be prudent to be aware that when you look at when you sort of measure these things from the lows um you would expect diminishing returns, right? you would expect diminishing returns. So, I think the way I'm going to play this, David, is not to get married to any single price because I I feel like that is a great way to get wrecked when you sort of say like, all right, it's got to go this price because what essentially happens is if it doesn't if it doesn't make it there, everyone hates you and and if it does make it there and then you and then you know, you say that's your top and then it goes beyond it, everyone else hates you. So, um there's not really a great way to play. I think the best thing to do right now is just know which way the wind is blowing, right? And so I would say within a month we need to at least start thinking about market cycle tops, whatever that price is. And the last thing I'll say is that, you know, if Bitcoin is at 130K, if it's at 130K or 140K and it's December, that's probably it, right? If it's at 180K, that's probably it. The point is is, you know, it's more of a time thing. Like Bitcoin has the opportunity to go up. The other thing too, David, I think people should should think about, you know, especially the people that that really like giving out price predictions, um, is, you know, when when Trump took office, the price of Bitcoin was 109K, right? It was it was only $3,000 lower than the current price, right? So, imagine how many price predictions people could have given you 9 months ago. Um, that would be completely wrong right now, right? Because Bitcoin is essentially at the same price that it was uh 9 months ago. So I I think it's more so a timing thing. It's more so it doesn't really matter exactly where it is. It's just by the end of the year. That's generally the time that you want to start thinking about Bitcoin heading back the other direction. And the there's two things I think you can look for confluence on a cycle top being in. Uh one of those is just a weekly close below the 50we moving average. Uh a couple of those they've always signified they've always signaled the end of the bull market. Whenever you get weekly closes below the 50we moving average um that's normally when Bitcoin then you know goes into a or sorry it didn't even go below the 50w week there on weekly closes it did here that historically ends the bull market. Right now that 50we moving average is around 99k. So by next week it'll be at 100k. So any weekly closes from here on out below 100k probably mean the cycle's over whenever that happens. And then the other thing to look at is is the 2-year yield. I I think the two-year yield will also signify when things are over. Um I mean, if I just pull it up very briefly, just uh just for completeness, if you if you look at the 2-year yield, basically what you'll see is this support level at 3.5%. Um so I think you argue that as long as as the 2-year yield is bouncing off this level, the bull market continues. But whenever the 2-year yield goes below 3.5%, it likely means that that the market is starting to price in more risk towards the labor market and less risk towards a a resurgence of of inflation. So, the good news uh is that the 2-year yield is bouncing just like it did last year when the Fed cut rates, but because they're not cutting as much this year, the bounce will likely not be as as as large. So, you might just see something like this where the the the 2-year yield bounces back up a little bit just to get in that final rally uh you know for Bitcoin and and and whatever the S&P is going to do and then probably see a drop down here as we get out into 2026 and that could put a put a nice bow on on the 4-year cycle for Bitcoin. Okay, here is um I'll get back to uh your 2026 outlook in just a minute. Here is a research paper from Fidelity Digital Assets. This was written actually in May 2024, so it's not exactly a new uh piece, but I just want to bring your attention to some fundamental aspects uh discussed here. Bitcoin is volatile, less so than many popular mega stocks. Bitcoin is currently less volatile than 33 S&P 500 stocks, and as recently as late 2023, there were 92 S&P 500 stocks more volatile than Bitcoin. It then goes on to say how Bitcoin's volatility has decreased over time. It's comparing its volatility to that of gold. And it and then it said um uh shortly after US was depacked from gold then as a private US citizens were allowed to own it again. Gold's price rapidly increased alongside inflation while volatility spiked to over 80 almost double Bitcoin's volatility in April 2024. Once gold became a recognized asset and the market settled on a longer term uh price range. Volatility declined as well. Um it's then comparing Bitcoin to a store of value asset rather than a speculative asset. If this is indeed true that Bitcoin's volatility profile continues to decline over time as it matures, how will that change our cycles analysis? Well, I mean, it just means the bare markets are a little bit more bearable, I guess, right? I mean, one of the one of the nice things, one of the nice things about diminishing returns is that you also have diminishing losses, right? The bare markets aren't as bad uh each cycle. If you just look here, I mean, look at the price draw downs for Bitcoin each cycle. Uh the first one was about 94%, the next one was about 87, the next one was 84 and then the next one was 77. So, you know, they've all I mean, no one wants the 70% drop, right? But I mean, they've gotten a little bit more bearable, if you will. Um, so I mean, if if the if the pattern continues then in 2026 or from whatever from whatever the all-time high is, right? If the alltime high is 150k uh or if it's 170k or 130k whatever the all-time high is you know probably you just look at whatever a 70% draw down from that point would be you know I think a 70% draw down would be um that would make the most amount of sense it would be in line with diminishing losses uh but it would also allow for you know some of the froth in the space to get sort of purged if if Bitcoin were to see that type of draw down. Yeah, I mean I think next year you will see a draw down uh in in the price of Bitcoin. I don't know the reason. I mean I I don't know what reason is going to be prescribed for it exactly. But yeah, I mean I I think a 70% drop from whatever the all-time high is. Uh seems about right. And the other thing too is is to remember that every cycle in the midterm year, you know, normally Bitcoin goes back to that 200E moving average. Um so and last cycle it actually went below it. Also, David, there's one other thing that, you know, I think this is a fascinating pattern is that and and it's not as accurate as it used to be, but historically, Bitcoin topped whenever the 200E SMA crossed the prior all-time high. So, like if you look at 2013, that market cycle top occurred when the 200E SMA passed the all-time high from the prior cycle. And then if you go and look at the next cycle, that all-time high, you can see that it predicted the next cycle top whenever the 200E SMA crossed that prior all-time high. it. Last cycle it was not as accurate. Um, by the time the 200 week SMA crossed the prior all-time high, Bitcoin's top had already been in for a few weeks. So, I I don't think you should wait for something like that to happen. But, it is relevant to know that the 200E SMA is at 53K and the prior cycle top was at 69K. Right? So whenever the 200E SMA does cross 69K, uh there's a really high chance that the cycle top is already in at that point. Um just something for people to keep in mind. Okay, thanks for that uh note. Uh can you overlay the Fed funds rate with the Bitcoin price um on your chart, please? I just want to point something out here. Um you'll see that in the last couple of bull cycles, um monetary policies were slightly different. So all throughout 2017 to 2019, as you know, the Fed was raising rates and then it dropped rates uh um yelling dropped rates around 2019 and then uh we had a period of zero zer zero interest rates throughout throughout CO into 2022 and then the bare market that preceded after the 2021 crash was followed by um the Fed raising rates. Now we have an environment where the Fed is dropping rates and people are wondering well how how is the crypto market going to react to a Fed easing and you know thus a Fed pivot. Um and I just want to point out that Bitcoin didn't do anything in 2019 when the Fed was dropping rates nor did it do anything in late 2024 when the well it kind of did it went up a lot. So it's inconsistent. I'll let you comment on that. I mean I think it's mostly just noise honestly. I mean, I I I think last year when the Fed cut rates, Bitcoin went up a little and then it dropped and then it went up a lot, right? That's what happened last year. And you could argue that's what's potentially happening this year. Last year when the Fed cut rates, there was like a 20% rally into that. This year there was about a 10% rally into that. And you could argue it's because last year we had a 50 basis point cut and this year was a 25 basis point cut. At the end of the day, I I think that narrative follows price, not the other way around. So, we could always look at this and try to justify, you know, what's going on based on monetary policy. But if you want a narrative, right, if you want a narrative to support, you know, how this could play out and how it could support a a 2026 bare market, it could be that the Fed, you know, lowers rates some, but they're not able to go down to 0% because they're the inflation is still nowhere near their target. Um, so, you know, I think something like that could happen. And I mean, if you go back and look at prior cycles, they're not always as clean as this one where you just go straight up and then you go straight down. A lot of the business cycles are not that clean. Um, like if you if if you just let's just go look at at interest rates where we we actually have a lot more data for it. Um, let me let me pull this up really quick here. So, you can actually go back and look all the prior business cycles. Like there's plenty of business cycles where they'll like, you know, they'll they'll lower rates for a little bit and then they have to raise rates again and then there's a larger drop. You you don't always just go straight up and straight down, right? There's plenty of other examples where they kind of go up and then they might, you know, move around a little bit and and the reasoning for that could be due to, you know, they they cut rates, but but but the reasoning could be that maybe inflation's still not at their target. I I still subscribe to the idea that the the the uh the two-year yield is an approximate an approximation for the neutral rate, right? And the neutral rate just being the sort of this abstract concept of whenever the Fed funds rate is above the neutral rate, the economy is is is still growing or expanding. When it's below it, um or sorry, when the Fed funds rate is below the neutral rate, the economy should be able to grow. And when it's above it, it should start to slow down. And and right now, the Fed funds rate is 4.25% and the 2-year yield is about 3.6%. 6%. So Powell, you know, when he he says that we're still in restricted territory, and I I agree with him. I think we are still in restricted territory, but the problem is that when the Fed cuts another 50 basis points, which is likely what they're going to do before the end of the year, if they cut another 50 basis points, then the the Fed funds rate will be approximately equal to the neutral rate. And and they might start to see inflation concerns pop up again. And so that could keep the Fed's hands tied uh for the first half of 2026. They might not be able to cut as much as they would like to. Now, there's a good chance that by mid 2026, they're going to replace Pal with someone else who will cut rates more. But I I I could see that being sort of the narrative behind a a sort of a downturn in at least the first half of 2026, just the inability to continue to aggressively cut rates. Is that the reason you see a bare market for 2026 for Bitcoin? I mean, I think I see a bare market for 2026 for Bitcoin just because of every midterm year has been a bare market. Um, and I, you know, I'm I'm I'm trying to like explain I'm trying to give a narrative that maybe people could could buy into, but at the end of the day, I I just I mean, I I've lived through three of them already. Um, I I recognize that, you know, the four-year cycle has has been a thing before Bitcoin. Like, it's not a Bitcoin specific thing. If you go back and look at the S&P in the 70s and 80s, what what you'll find is that it was very cyclical every four years. In fact, you had lows every four years, right? Like 1962, 1966, 1970, 1974, uh 1978, 1982, like you can see that the market is cyclical, right, on a 4-year basis. But every so often you get something that takes it off that cycle, right? like we had the financial crash financial crisis in 2008 and 2009 which is not part of a 4-year cycle. So, you know, I I just I subscribe to the theory if it's not broke, don't fix it, right? If B bit Bitcoin historically goes up in the pre-h having year, the having year, and the posth having year, and it historically drops in the midterm year, and and you can even see that very clearly if you just look at at yearly candles for Bitcoin. The only red candles for Bitcoin uh are the midterm years, right? 2014, 2018, and 2022. So, I I I think it's going to be rad, but again, it it doesn't h it doesn't mean that the top has to be in. It just means that next year's returns will likely uh not be great, but again, it's just an opportunity for people to stick around. Yeah. So, maybe just less bullish than this year, not necessarily a big crash, but yeah, there's always Yeah, I mean, I would say there's a chance the best case scenario is more so like a sideways move, right? where where you're basically where where people are basically faced with people like me who who are who are deterministic about it potentially being a bare market and so maybe you have some sellers for that and but then there's perhaps other forces like institutions getting in that that keep it from dropping um you know too much. So, I I I'm not saying like it it has to be one, but what I what I would recommend normally or what I say is that one of the things that you can often do in midterm years with Bitcoin is you don't have to sell all your Bitcoin. You know, you don't it's not like you have to go sell in fear of a crash. Uh but what you could at least do is you could convert altcoins to Bitcoin because um in midterm years uh you know Bitcoin does tend to hold up better in those crashes and and Bitcoin also tends to get to new all-time highs first the next cycle. So, as long as you can stomach that, I think that's at least one prudent thing that that people could do uh would just be to to sort of uh focus in on Bitcoin and and just, you know, valuing their portfolio in Satoshi's because a lot of times in the midterm years, a lot of the altcoins drop like 90 95%. All right. Uh like to tie this back into stocks and equities. Uh so, the the um the notion that Bitcoin uh may see a bare market in 2026, I wonder how that relates to stocks. So, here we have Fed Chair Jerome Powell at a speech in Rhode Island on Tuesday. Um, and he said, "Stocks appear to be highly or fairly highly valued. I'm not sure if the stock market reacted to this in particular, but the stock market did fall when the NASDAQ is down almost 1% on the trading day. Now, um, Ben, you told me offline that perhaps uh there there is a lead and lag when it comes to Bitcoin and stocks. So, can you just comment on how these two asset classes um move together? And I asked this because going back to sentiment, sentiment for the crypto space right now appears to be rather weak compared to the sentiment in the stock market. The S&P is just reaching multiple all-time highs week after week. I talk to the junior mining guys all the time and the GEX is up 90% year to date. So, that sector is booming. It just seems like there's euphoria everywhere else. But um in a year when Bitcoin's up nearly 70%, interest is relatively muted. So let's just discuss this. Yeah, absolutely. I mean, interest is really low in crypto. Uh there's this social risk metric that we talked about before and it's really low right now. Like it's at historic lows and very different from what we saw in 2021 and 2017. Part of that could be due to diminishing returns. The other part of it could just be to the fact that altcoins didn't really move as much this cycle as as some of the prior cycles. And so like a lot of people hold, you know, they end up holding more altcoins. So, so if Bitcoin goes 700%, it doesn't mean that they're necessarily excited about that. But I think one of the things to think about with the S&P and and Bitcoin is that a lot of times Bitcoin is able to sniff out things, I think, a little bit quicker than the stock market is able to. And and just a great example of that is just look at 2023. Uh, Bitcoin was, you know, I mean, it it put in a high in in April and then it went to a slightly higher high in the summer, but by the time the S&P got into the I mean, it by the time it got into the meat of the correction, Bitcoin had already bottomed, right? Like Bitcoin basically found a low pretty early on in the correction by the S&P 500. and and then by the time the S&P was back at new highs, new at least new cycle highs, Bitcoin was already well broken out into new cycle highs. So, I think there's an element of Bitcoin is is able to uh sort of sniff things out a little bit quicker. It might feel like Bitcoin is lagging the S&P, but I would argue it's actually leading the S&P. And the other thing to to consider as well is that, you know, sometimes it feels like Bitcoin isn't doing as as good as the S&P, but remember from the low, the S&P is only up 90%. Which I mean, for the S&P, that's a great return in only a few years. Uh, but to put that in perspective, Bitcoin is up almost 700%. Right? So, when we talk about earlier, we talked about potentially a bare market in 2026, um, and maybe a 70% draw down. One of the reasons why Bitcoin tends to draw down more than the S&P. You might see like a 20% drop by the stock market. Often times that can lead to a much deeper correction by crypto because it went up so much more in the bull market, right? So again, it's not necessarily a negative thing. It's just that we have to regroup. We have to go through that same painful process um yet again. So you you could see I mean if the S&P is starting a correction right now uh back down, which I mean still remains to be seen so far. It just looks like it's still at alltime highs. uh but it would actually be in line with historical seasonality. If you look at the year-to- date return of the S&P 500 and you look at post all prior post election years going back to 1928, normally there's a capitulation a low in Q1 or early Q2 and then the stock market rallies for you know sort of the middle part of the year. It then tends to find a little bit of weakness in late September going into October and then you normally get one final rally uh into into the holidays. So if you overlay this year with the average, you can see that we are kind of extended from the average. And so if the stock market is finding a local top here in late September or, you know, or in the next week or so, it would actually be very timely and it would be it wouldn't necessarily be anything out of the ordinary. Um we we've seen this happen many many times. And just one last thing, even last cycle, we saw the same exact thing. We saw the S&P 500 find a local top and then it found a local low in early in early October. And then that that correction back to that 20week SMA then set up the final rally into the market cycle top. So you can see right now the S&P is nowhere near its 20we moving average. It'd have to drop about 5% to get there. Bitcoin is already there, right? Like Bitcoin is already at its 20week moving average. So that that's one of the reasons why if if the S&P does start to draw, Bitcoin could be weak a little bit longer, but Bitcoin could start to could could it could start to show strength before uh the S&P's correction is over if it if it's going to play out like it did say like in 2023 and and and 2024. Yeah, let's talk about let's let's finish off on Ethereum before I let you go. Uh Ben, so uh year to date, um I'm looking at my screen here. Ethereum's up about 25%. Bitcoin's up about 19%. Slight outperformance. It really started to outperform Bitcoin in the last six or couple months since July. What happened since July? Is that's just a a matter of Ethereum finally catching up to Bitcoin. In other words, playing catch-up or um is there an Ethereum specific narrative here at play? Yeah, it's an it's an Ethereum specific narrative. every time that Ethereum goes through its regression band, uh, it did it say in, you know, in 2015, it did it in 2016, um, 2019, 2025, right? Every time that Ethereum goes to its logarithmic regression band, uh, that's where the valuation of Ethereum bottoms against Bitcoin. And the the the ETH Bitcoin valuation here is this blue line. So, the reason that Ethereum was stuck in traffic on Struggle Street for so long was because the only reason it was going up from 2022 through early 2025 was because Bitcoin was lifting it up, right? Because you can see that the entire time it was going up, it was bleeding against Bitcoin. But when it broke down, it broke down in early 2025. It went home. it it sort of rinsed out all the all the the weak hands if you want to call it that and then now it has led to an explosive rally to alltime highs. So, my view was that after it goes home, it can then go to all-time highs. But I've also been pretty, you know, pretty open about after it hits the all-time high for the first attempt, it likely will get rejected, right? The first attempt will be rejected. And my guess is that what needs to happen now is every like every other time, uh, Ethereum will just check in with the 21week EMA sometime the next couple of months, um, just like it did the last couple of cycles. And when it does that, it will then go into its final rally for the cycle into the market cycle top. So you can see that happened in in late 2017. It happened in late 2021 and it very well could happen in late 2025 and then after it tags that 21 week EMA, you'll likely see another rally to all-time highs and then you'll have the 2026 bare market. But it's not I don't think that I I do think Ethereum has another rally left in it and I think it'll take it to alltime highs. Okay, very good. Um, and closing off, I do wonder how your um, modern portfolio theory um, allocation has shifted now that Ethereum has rallied significantly since the last couple of months. It's about 8020. Um, I think 8020. Yeah, it's about 8020 makes the most amount of sense right now. It's like 80% Bitcoin, 20% Ethereum for a crypto portfolio. You could obviously I mean I'm bullish on on the ETH Bitcoin valuation in general from here to the end of the cycle, but in the short term ETH is going to drop against Bitcoin. Um and and this was I mean we talked a lot about this on my channel that Ethereum would would hit a local top on its Bitcoin valuation when Ethereum hits an all-time high. Ethereum hit an all-time high the week of August 18th. That's exactly where ETH Bitcoin found a local top. My guess is that you're gonna have one more rally by ETH against Bitcoin, but it's not going to happen until early early November at the earliest. It would be my guess. So, watch for ETH Bitcoin to fall back in here to its 21week EMA. Uh, you know, sometime probably over the next 4 to 6 weeks and then after it does that, I think you'll see it get one final rally up to about maybe like 0.053 or so. Uh, and then that I'm not saying that has to be the top for ETH Bitcoin, but that's where that that'll probably be the top for me. All right, very good. Thanks very much. I appreciate your time, uh, Ben, and, uh, it's always good catching up with you. So, I'll put the link down below to where you can find, um, Ben's work and into the cryptoverse. Tell us what we can find there. Yeah, we just have a lot of charts. We have, um, you know, charts for crypto, precious metals, stocks, risk metrics, longer regression curves, all that other stuff, all that great stuff. Um, but again, you can just follow me on YouTube as well. Uh, and we go over this stuff on a daily basis. All right. And, um, and, uh, X as well. I'll put put your, uh, social media handle there. Thanks very much, Ben. Uh, good to see you and we'll talk again soon. Take care for now. Thanks for having me. Thank you for watching. Don't forget to like and subscribe.
Bitcoin's Next Cycle Top Revealed; When Does 'Altcoin Season' Start? | Ben Cowen
Summary
Transcript
I do think we will have a cycle top before the end of the year, uh, which will then set up the 2026 bare market. If Bitcoin is at 130K, if it's at 130K or 140K and it's December, that's probably it, right? If it's at 180K, that's probably it. I think this cycle for Bitcoin has essentially done what it's always done. The main reason it feels different for people is because altcoins have lagged a lot. Ben Cowan joins us once more. He is a founder of into the cryptoverse. He's got a great platform, very interesting YouTube channel. Check out his work link down below. We'll talk about his outlook on Bitcoin, Ethereum, the crypto markets, uh the major factors driving crypto right now, and uh the breaking news that may impact investors decisions. Welcome back to the show, Ben. Good to see you. Last time I had you on was way back in May, so it's been a while. Good to catch up. Yeah, it's always good to see you, David, and I'm I'm happy to be here on the channel once again. Since the uh summertime, early summertime when I spoke to you last, uh much has changed for crypto. Ethereum, which was once a lagard, has now skyrocketed. We'll talk about that. Um let's talk about Bitcoin first, the biggest crypto. Uh you've mentioned on my show before and on your own show as well that September the fall usually has historically been a consolidating month, but Bitcoin's added double digits since the beginning of um August. Um sorry, not double digits, it's it's added uh like something like yeah close to 10%. Um so we we'll talk about why. Yeah. So, Bitcoin right now, I mean, it it technically speaking, um, we are seeing a so far it's been a positive month. We also saw 2023 September and 2024 September was also slightly green as well. Uh so so basically what happens with Bitcoin historically is it it'll put in a local top sometime in August or early September and then it'll find a low in September and sometimes the low will come in early October but that's the general trend right that's the general trend and so you know technically August was a red month but also Bitcoin put in a new all-time high in August right so it went up for the first half of August and in September. So far, Bitcoin has been doing quite well. Uh but it also put in a new low uh but you know it went lower than where it had been basically since you know June July, right? So it's a very common pattern that Bitcoin has. If you go back and look at basically all prior post election years, you'll find a low or a high in August or early September and then a low kind of like late September, early October. Here you see it in 2021. You'll even see it in 2020. A high there in August, and then a low forms in September. This pattern right here actually looks really similar to what we're going through right now. Um 2017, again, another high in August and a low in September. And then in 2013, you had uh this high right here in August, and then a wick down in like late September, early October. So, it it's generally following the blueprint, right? that you get a high in August or early September and then the market cools off for a few weeks uh a consolidation phase and and you can even see how similar this move is to what we had last cycle where you have this kind of capitulation low and then kind of you go up and to the right and then you pop up into that August high go sideways and then you go down and then you just kind of consolidate there just above that 20week moving average, right? It's it's basically the same thing uh playing out. And so to me, this isn't really different than what it's historically happened. We normally find a high in August. We normally find a low in September. So far, it seems to be playing out generally how it how it normally does. I mean, so far, I mean, the consolidation period for Bitcoin in in the third quarter will typically last until kind of like the end of September. If you even if you go look at at all the prior years this cycle, you can see that the breakouts did not happen until October, right? you have October of 2023 and then last year it was actually late October, early November. This is a common pattern. I mean, we've seen this many, many times, many other times as well in 2020. The breakout was also in October. Uh, so I I kind of think you're you're you're looking at something very similar where you have these, you know, you have these breakouts, but the breakouts don't normally happen until October. So, I would not expect new all-time highs. I mean, at least for the the rest of September. Hopefully, we can get one as the year goes on. Is it normal though for uh Bitcoin to rally into the end of the year? The Santa Claus rally is talked about a lot for the equities markets. Um what about for for the crypto markets? Yeah, usually it does. Uh the the one thing we have to be aware of for this year is that market cycle tops for Bitcoin, this kind of gets in discussion of of the whole four-year cycle. Market cycle tops for Bitcoin tend to occur in the fourth quarter of the year. So you have Q4 of 2013, Q4 of 2017, and then Q4 of 2021 where the actual top occurred. So so far this cycle, you know, we've we've seen Bitcoin continue to go higher even into into the following year after Q4. But when you look at the ROI of Bitcoin, say like as measured from the low each cycle, right? Whether you take that low, this low here, right? each of these lows. If you measure out the ROI from the low uh for Bitcoin and you just kind of plot them over one another, you can see we're we're getting close to, you know, potentially the end of of the cycle. So, I I would say that, you know, once we get out into Q4, I I don't think investors should be complacent, right? I don't think they should be complacent. I I I think if we do get a breakout, we need to just be aware that at some point uh we likely will put in a a cycle top for this cycle. Uh see some downside in 2026 and then just repeat the whole thing again. So and also and I think we've talked about this before as well. Um it does very much appear like we are having once again diminishing returns. Every single cycle seems like we drop down a little bit uh in terms of in terms of the returns for Bitcoin. So, a lot of times people think that like this cycle is different because the the returns haven't been as great for Bitcoin, but it's just an artifact of of a very high a much higher market cap and the need to have exponentially more volume to move the price. Uh, correct me if I'm wrong, but I believe you said in the past Bitcoin dominance could top around 60. I mean, um, you're sort of right. It topped around 65 and then it just kind of fell back. We're now below 60. Um, so walk us through uh why you initially thought there was a resistance level around 60 and then ultimately where it's headed from here because it has been dropping ever since June. Well, way back when the reason we talked about 60% was because that was the 618 fib extension. I mean, that wasn't even the original reason. The original reason was just I've seen Bitcoin dominance in prior cycles go to, you know, 70 80% and whatnot. Uh, so it made sense to assume that dominance could at least return back to 60%. But if you look at last cycle, we saw dominance return to the 618. This cycle it hit the 6 618. That's where it got a correction. But after it got that correction, I actually flipped bullish on dominance again uh back in late 2024. And the main reason was because we we had not yet seen Ethereum go to its regression band, right? And and normally in order for dominance to really top out, ETH, Bitcoin, the valuation of Ethereum against Bitcoin has to bottom. And the issue in December or sorry, in November, December of 2024 is that Ethereum had not gone to its regression band yet, right? Like it was it was still up here. And so, and if you just kind of overlay, right, if and I I mean, you can you can always stop me if I'm if I'm getting ahead of ourselves, but um but if you look at ETH Bitcoin, you can see normally it bottoms out whenever Ethereum goes to its regression band. And so, the reason why it sort of made sense to flip bullish on dominance and I I gave a target actually when we were at 60%, I said the next major level for us to to hit would be 66 considering that Ethereum had not yet gone home. But then Ethereum went home, which is the regression band. That's where ETH Bitcoin bottomed uh and we've seen, you know, we've seen Bitcoin dominance fall uh in the short term. I think what we're about to see though is the final rotation of the cycle back to Bitcoin. Uh this is a very common thing. It should not be considered like a contrarian view in my opinion. If you look at at all prior post having years for Bitcoin dominance, this is essentially what happened. In fact, last cycle, dominance found a low basically right around this level and then it went back up into its final rally, right? You can see that. And then in 2017, in August, September, it found a low and then went up into its final rally. So, I think that Bitcoin dominance right now is finding a low and I think it's going to go up here as we get into uh as we get into the month of October. Crypto has been heating up all summer. Bitcoin has continuously surpassed new all-time highs while Ethereum gained more than 50% in just a few weeks since the beginning of the summer. Is it altcoin season? What's going on? 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Go to the link in the description or scan the QR code here to learn more today. And just stepping back into your broader cycle theory approach here. Where are we right now in Bitcoin's overall larger uh cycle? How do we compare right now to 2017 uh 2021 or even 2013? I mean, look, no matter how you measure it, if you want to measure it from the ROI from the low, we're getting pretty close to the end. Again, all prior major cycle tops occurred in Q4. If you measure it from the if you go ROI peak to peak, you can see we we've got a little bit longer, right? This would suggest we got a little bit longer, but not again Q4 is not the time to get complacent about it. Um, and then if you measure it from the having, you can see we're getting, you know, we're getting pretty far along. So, you know, I think this cycle for Bitcoin has essentially done what it's always done. The main reason it feels different for people is because altcoins have lagged a lot, right? Like altcoins haven't really kept pace. And so that's why this cycle doesn't feel the same as as prior cycles. But, you know, Bitcoin is is doing what it's always done. If history is an indication, you could see another rally uh in the fourth quarter, at least some point in Q4. But I do think we will have a cycle top before the end of the year. Uh which will then set up the 2026 bare market. Right? Again, all prior midterm years for Bitcoin have been bare markets. 2014, uh 2018 and 2022, right? You can see this is 2014. This is 2018. Here's 2022. And you know, sort of the the rhetoric right now is that institutions have changed this and that it won't happen again. And I I mean I'll be the first to say that, you know, anything's possible, right? I'm not going to to say that it's impossible. Usually those bare markets happen from places of euphoria uh and and and places where altcoins are are going parabolic. We haven't really seen that. Um so, but who knows? Maybe we will, right? Maybe we will see that in the next few months. I don't know. Um, but I do think by the end of the year if if Bitcoin is is is if if people are fomoing into Bitcoin, if it if it feels a little bit more euphoric and whatnot, it might be time to sort of think about, all right, things might go south in in 2026, but it'll likely just be, you know, an opportunity for for long-term investors to to buy Bitcoin cheaply again, just like they were able to in, you know, 2014, 2018, and and 2022. So, um, I think we're getting near the end of the cycle. I I still think that there's still room for Ethereum, you know, to run back up to all-time highs. I I think you will see that. But in the short term, I think the the the most obvious short-term move right now is that dominance, Bitcoin dominance should go back up. So liquidity right now should flow back to Bitcoin and then Bitcoin should try to use that liquidity to try to push back up hopefully near those highs again and hopefully can put in another all-time high. But that's what that's how I see it playing out. I'm going to get your cycle high in just a minute. So stay tuned for that. Uh but in the past two bull cycles 2021 and 20 um late 2017, the Bitcoin dominance fell dramatically uh before Bitcoin topped and then we saw a bare market thereafter. So, in other words, uh we had to have a really big capital flow into the alt space, uh you know, FOMOing at the top from the retail space, if you will, before Bitcoin topped. Um, and you're not saying that's going to happen this time. Well, no. I I So, this is a a common thing that I think people get confused by. I I'm not say I'm not saying it's not going to happen, and this is something that people have misunderstood me for like the last several years. A lot of times when I say that that Bitcoin dominance is going to go up, the often response is, "Oh, so Ben's saying there's never going to be an alt season." The the thing about alt season is is that timing is really important, right? There's people buying alts 3 years ago that would have told you alt season was around the corner and then we saw dominance go up for three and a half years. What I'm saying is that the alt season calls right now are in my opinion still premature. And when I say alt season, I don't mean their USD valuations, right? like alts can go up against the US dollar if Bitcoin's going up. My point is that every like look at the last two alt seasons. All right, you can see them pretty clearly right here, right? So, let's just highlight them so that there's no, you know, so that I'm not being ambiguous in in any way. I'm trying to even find the um the drawing tool on here so I can show you what I'm talking about. But basically, um I don't even know where this stuff is anymore. Uh while you're doing that, my my Yeah. I I think my broader question is do alts need to rally a lot more before we see Bitcoin top at this cycle? But um I I'll let you answer that in your way. Yeah. Yeah. But look at look at the last two major alt seasons, right? You had that one right there in 2017 or 2018. 2017 2018 and then that one right there, right? You see those two, but notice that both of them when they happened, it was it what preceded them, right? What preceded them was Bitcoin dominance dropping and then getting one last rally. Right. I see. One last rally and then it dropped. Now, now look at the cycle before, right? Dominance was dropping and then it got one last rally and then it dropped. So, right now we're seeing the same thing, right? Dominance has been dropping. What I'm suggesting is that dominance is forming a low to go into the final dominance rally, right? So, I'm not saying there can't be an alt season. What I'm saying is that liquidity right now is likely going to flow back to Bitcoin. And the reason I say it is if you look at you just look at monthly returns uh for for Bitcoin dominance, you'll find that September is often the month where dominance reverses course. Okay? So, look right here at this at this September. Now, look at at 2020. You can see dominance found a low right around in September. Look at 2017. In September, dominance found a low and it had that final rally. And if you go back and look at a lot of these years, look at 2022, same thing, right? Dominance found a low in September. There's so many examples where dominance finds a low in like around that Q3 time frame and then goes up after it. Or the reverse can also be true. If dominance is going up into September, then it typically reverses course and goes down after it like you saw in 2019. So my point here is to say and and also even in 2021 look dominance found a low in September and then it got its final rally up before it then went to its its low. So my argument right now is not that you can't have alt season. It's just that the path to get there is important and it's often overlooked. And you know, I I and the reason I feel, you know, so strongly about this, right, is because we've basically just gone through 4 years of people screaming that alt season is around the corner. Uh and and sort of fading Bitcoin dominance and then dominance to remind them that, hey, Bitcoin is the reason we're here, not your altcoin. So my my point is to say it's not that it can't happen. It's just that in the short term, I think the most likely outcome is dominance first goes up and then it goes down. Uh, well, I'm gonna ask you the very annoying question. Is altcoin season around the corner then? Because according to your analysis, if Bitcoin dominance goes up a little bit more of repeating the last couple cycles, if it goes down, that should signal the return of all coin season. No. Yeah. I mean, it very well could, but I I don't think we're at that part of the cycle right now. Like, I I'm not saying it's not I'm not saying it's not coming. It's just that we're not at that point of the cycle yet. I think the first thing to do right now is for dominance to go back up and hopefully dominance goes up on a Bitcoin rally, right? If it can go up on a Bitcoin rally, then that would strongly support the idea of of an alt season later on this year. Um there are examples in history where low cap things top out or sorry where where blue chip dominance tops and then the market crashes where you don't get that final move by you know the the penny stocks or whatever. Um but if if this is going to play out how crypto has always played out let's just forget about all the other markets and all the other comparisons you can make. If it's going to play out how it how it's historically played out, then the expectation would be that first liquidity goes back into Bitcoin and then after that it has the opportunity to go back into alts. So, if you're going to have an alt season, it probably won't happen until after the next Bitcoin dominance rally. Got it. Uh, what is the Bitcoin cycle high for you? You said it might top out by the end of the year. I mean, I I think my guess is that it does not go above 200. Um I I think that diminishing returns is very much a thing. You know, 124 is kind of an interesting number because um which is where Bitcoin already went. Uh the main reason it is it I and I don't know why I even noticed these things, but like I I just remember in 2013, you know, Bitcoin topped out at like 1.24K um or so. Like it was it was right around 1.24K, I believe. That that that high. Yeah, basically right around that level. Uh and then but what's really interesting is in August of 2020, Bitcoin found a local top at 12.4K, right? And then you know August 2025 124K. So you could argue that the reason why it was the cycle top in 2013 was because it happened in Q4. In you know in 2020 it did not happen in the fourth quarter we had and it was also not even the post having year. So, what I think is is you'll likely have another move by Bitcoin to the upside and I could see it topping anywhere from that 124 and it could go as high. I mean, it could go as high as as you know close to 200, but um I think I I I think it it would be prudent to be aware that when you look at when you sort of measure these things from the lows um you would expect diminishing returns, right? you would expect diminishing returns. So, I think the way I'm going to play this, David, is not to get married to any single price because I I feel like that is a great way to get wrecked when you sort of say like, all right, it's got to go this price because what essentially happens is if it doesn't if it doesn't make it there, everyone hates you and and if it does make it there and then you and then you know, you say that's your top and then it goes beyond it, everyone else hates you. So, um there's not really a great way to play. I think the best thing to do right now is just know which way the wind is blowing, right? And so I would say within a month we need to at least start thinking about market cycle tops, whatever that price is. And the last thing I'll say is that, you know, if Bitcoin is at 130K, if it's at 130K or 140K and it's December, that's probably it, right? If it's at 180K, that's probably it. The point is is, you know, it's more of a time thing. Like Bitcoin has the opportunity to go up. The other thing too, David, I think people should should think about, you know, especially the people that that really like giving out price predictions, um, is, you know, when when Trump took office, the price of Bitcoin was 109K, right? It was it was only $3,000 lower than the current price, right? So, imagine how many price predictions people could have given you 9 months ago. Um, that would be completely wrong right now, right? Because Bitcoin is essentially at the same price that it was uh 9 months ago. So I I think it's more so a timing thing. It's more so it doesn't really matter exactly where it is. It's just by the end of the year. That's generally the time that you want to start thinking about Bitcoin heading back the other direction. And the there's two things I think you can look for confluence on a cycle top being in. Uh one of those is just a weekly close below the 50we moving average. Uh a couple of those they've always signified they've always signaled the end of the bull market. Whenever you get weekly closes below the 50we moving average um that's normally when Bitcoin then you know goes into a or sorry it didn't even go below the 50w week there on weekly closes it did here that historically ends the bull market. Right now that 50we moving average is around 99k. So by next week it'll be at 100k. So any weekly closes from here on out below 100k probably mean the cycle's over whenever that happens. And then the other thing to look at is is the 2-year yield. I I think the two-year yield will also signify when things are over. Um I mean, if I just pull it up very briefly, just uh just for completeness, if you if you look at the 2-year yield, basically what you'll see is this support level at 3.5%. Um so I think you argue that as long as as the 2-year yield is bouncing off this level, the bull market continues. But whenever the 2-year yield goes below 3.5%, it likely means that that the market is starting to price in more risk towards the labor market and less risk towards a a resurgence of of inflation. So, the good news uh is that the 2-year yield is bouncing just like it did last year when the Fed cut rates, but because they're not cutting as much this year, the bounce will likely not be as as as large. So, you might just see something like this where the the the 2-year yield bounces back up a little bit just to get in that final rally uh you know for Bitcoin and and and whatever the S&P is going to do and then probably see a drop down here as we get out into 2026 and that could put a put a nice bow on on the 4-year cycle for Bitcoin. Okay, here is um I'll get back to uh your 2026 outlook in just a minute. Here is a research paper from Fidelity Digital Assets. This was written actually in May 2024, so it's not exactly a new uh piece, but I just want to bring your attention to some fundamental aspects uh discussed here. Bitcoin is volatile, less so than many popular mega stocks. Bitcoin is currently less volatile than 33 S&P 500 stocks, and as recently as late 2023, there were 92 S&P 500 stocks more volatile than Bitcoin. It then goes on to say how Bitcoin's volatility has decreased over time. It's comparing its volatility to that of gold. And it and then it said um uh shortly after US was depacked from gold then as a private US citizens were allowed to own it again. Gold's price rapidly increased alongside inflation while volatility spiked to over 80 almost double Bitcoin's volatility in April 2024. Once gold became a recognized asset and the market settled on a longer term uh price range. Volatility declined as well. Um it's then comparing Bitcoin to a store of value asset rather than a speculative asset. If this is indeed true that Bitcoin's volatility profile continues to decline over time as it matures, how will that change our cycles analysis? Well, I mean, it just means the bare markets are a little bit more bearable, I guess, right? I mean, one of the one of the nice things, one of the nice things about diminishing returns is that you also have diminishing losses, right? The bare markets aren't as bad uh each cycle. If you just look here, I mean, look at the price draw downs for Bitcoin each cycle. Uh the first one was about 94%, the next one was about 87, the next one was 84 and then the next one was 77. So, you know, they've all I mean, no one wants the 70% drop, right? But I mean, they've gotten a little bit more bearable, if you will. Um, so I mean, if if the if the pattern continues then in 2026 or from whatever from whatever the all-time high is, right? If the alltime high is 150k uh or if it's 170k or 130k whatever the all-time high is you know probably you just look at whatever a 70% draw down from that point would be you know I think a 70% draw down would be um that would make the most amount of sense it would be in line with diminishing losses uh but it would also allow for you know some of the froth in the space to get sort of purged if if Bitcoin were to see that type of draw down. Yeah, I mean I think next year you will see a draw down uh in in the price of Bitcoin. I don't know the reason. I mean I I don't know what reason is going to be prescribed for it exactly. But yeah, I mean I I think a 70% drop from whatever the all-time high is. Uh seems about right. And the other thing too is is to remember that every cycle in the midterm year, you know, normally Bitcoin goes back to that 200E moving average. Um so and last cycle it actually went below it. Also, David, there's one other thing that, you know, I think this is a fascinating pattern is that and and it's not as accurate as it used to be, but historically, Bitcoin topped whenever the 200E SMA crossed the prior all-time high. So, like if you look at 2013, that market cycle top occurred when the 200E SMA passed the all-time high from the prior cycle. And then if you go and look at the next cycle, that all-time high, you can see that it predicted the next cycle top whenever the 200E SMA crossed that prior all-time high. it. Last cycle it was not as accurate. Um, by the time the 200 week SMA crossed the prior all-time high, Bitcoin's top had already been in for a few weeks. So, I I don't think you should wait for something like that to happen. But, it is relevant to know that the 200E SMA is at 53K and the prior cycle top was at 69K. Right? So whenever the 200E SMA does cross 69K, uh there's a really high chance that the cycle top is already in at that point. Um just something for people to keep in mind. Okay, thanks for that uh note. Uh can you overlay the Fed funds rate with the Bitcoin price um on your chart, please? I just want to point something out here. Um you'll see that in the last couple of bull cycles, um monetary policies were slightly different. So all throughout 2017 to 2019, as you know, the Fed was raising rates and then it dropped rates uh um yelling dropped rates around 2019 and then uh we had a period of zero zer zero interest rates throughout throughout CO into 2022 and then the bare market that preceded after the 2021 crash was followed by um the Fed raising rates. Now we have an environment where the Fed is dropping rates and people are wondering well how how is the crypto market going to react to a Fed easing and you know thus a Fed pivot. Um and I just want to point out that Bitcoin didn't do anything in 2019 when the Fed was dropping rates nor did it do anything in late 2024 when the well it kind of did it went up a lot. So it's inconsistent. I'll let you comment on that. I mean I think it's mostly just noise honestly. I mean, I I I think last year when the Fed cut rates, Bitcoin went up a little and then it dropped and then it went up a lot, right? That's what happened last year. And you could argue that's what's potentially happening this year. Last year when the Fed cut rates, there was like a 20% rally into that. This year there was about a 10% rally into that. And you could argue it's because last year we had a 50 basis point cut and this year was a 25 basis point cut. At the end of the day, I I think that narrative follows price, not the other way around. So, we could always look at this and try to justify, you know, what's going on based on monetary policy. But if you want a narrative, right, if you want a narrative to support, you know, how this could play out and how it could support a a 2026 bare market, it could be that the Fed, you know, lowers rates some, but they're not able to go down to 0% because they're the inflation is still nowhere near their target. Um, so, you know, I think something like that could happen. And I mean, if you go back and look at prior cycles, they're not always as clean as this one where you just go straight up and then you go straight down. A lot of the business cycles are not that clean. Um, like if you if if you just let's just go look at at interest rates where we we actually have a lot more data for it. Um, let me let me pull this up really quick here. So, you can actually go back and look all the prior business cycles. Like there's plenty of business cycles where they'll like, you know, they'll they'll lower rates for a little bit and then they have to raise rates again and then there's a larger drop. You you don't always just go straight up and straight down, right? There's plenty of other examples where they kind of go up and then they might, you know, move around a little bit and and the reasoning for that could be due to, you know, they they cut rates, but but but the reasoning could be that maybe inflation's still not at their target. I I still subscribe to the idea that the the the uh the two-year yield is an approximate an approximation for the neutral rate, right? And the neutral rate just being the sort of this abstract concept of whenever the Fed funds rate is above the neutral rate, the economy is is is still growing or expanding. When it's below it, um or sorry, when the Fed funds rate is below the neutral rate, the economy should be able to grow. And when it's above it, it should start to slow down. And and right now, the Fed funds rate is 4.25% and the 2-year yield is about 3.6%. 6%. So Powell, you know, when he he says that we're still in restricted territory, and I I agree with him. I think we are still in restricted territory, but the problem is that when the Fed cuts another 50 basis points, which is likely what they're going to do before the end of the year, if they cut another 50 basis points, then the the Fed funds rate will be approximately equal to the neutral rate. And and they might start to see inflation concerns pop up again. And so that could keep the Fed's hands tied uh for the first half of 2026. They might not be able to cut as much as they would like to. Now, there's a good chance that by mid 2026, they're going to replace Pal with someone else who will cut rates more. But I I I could see that being sort of the narrative behind a a sort of a downturn in at least the first half of 2026, just the inability to continue to aggressively cut rates. Is that the reason you see a bare market for 2026 for Bitcoin? I mean, I think I see a bare market for 2026 for Bitcoin just because of every midterm year has been a bare market. Um, and I, you know, I'm I'm I'm trying to like explain I'm trying to give a narrative that maybe people could could buy into, but at the end of the day, I I just I mean, I I've lived through three of them already. Um, I I recognize that, you know, the four-year cycle has has been a thing before Bitcoin. Like, it's not a Bitcoin specific thing. If you go back and look at the S&P in the 70s and 80s, what what you'll find is that it was very cyclical every four years. In fact, you had lows every four years, right? Like 1962, 1966, 1970, 1974, uh 1978, 1982, like you can see that the market is cyclical, right, on a 4-year basis. But every so often you get something that takes it off that cycle, right? like we had the financial crash financial crisis in 2008 and 2009 which is not part of a 4-year cycle. So, you know, I I just I subscribe to the theory if it's not broke, don't fix it, right? If B bit Bitcoin historically goes up in the pre-h having year, the having year, and the posth having year, and it historically drops in the midterm year, and and you can even see that very clearly if you just look at at yearly candles for Bitcoin. The only red candles for Bitcoin uh are the midterm years, right? 2014, 2018, and 2022. So, I I I think it's going to be rad, but again, it it doesn't h it doesn't mean that the top has to be in. It just means that next year's returns will likely uh not be great, but again, it's just an opportunity for people to stick around. Yeah. So, maybe just less bullish than this year, not necessarily a big crash, but yeah, there's always Yeah, I mean, I would say there's a chance the best case scenario is more so like a sideways move, right? where where you're basically where where people are basically faced with people like me who who are who are deterministic about it potentially being a bare market and so maybe you have some sellers for that and but then there's perhaps other forces like institutions getting in that that keep it from dropping um you know too much. So, I I I'm not saying like it it has to be one, but what I what I would recommend normally or what I say is that one of the things that you can often do in midterm years with Bitcoin is you don't have to sell all your Bitcoin. You know, you don't it's not like you have to go sell in fear of a crash. Uh but what you could at least do is you could convert altcoins to Bitcoin because um in midterm years uh you know Bitcoin does tend to hold up better in those crashes and and Bitcoin also tends to get to new all-time highs first the next cycle. So, as long as you can stomach that, I think that's at least one prudent thing that that people could do uh would just be to to sort of uh focus in on Bitcoin and and just, you know, valuing their portfolio in Satoshi's because a lot of times in the midterm years, a lot of the altcoins drop like 90 95%. All right. Uh like to tie this back into stocks and equities. Uh so, the the um the notion that Bitcoin uh may see a bare market in 2026, I wonder how that relates to stocks. So, here we have Fed Chair Jerome Powell at a speech in Rhode Island on Tuesday. Um, and he said, "Stocks appear to be highly or fairly highly valued. I'm not sure if the stock market reacted to this in particular, but the stock market did fall when the NASDAQ is down almost 1% on the trading day. Now, um, Ben, you told me offline that perhaps uh there there is a lead and lag when it comes to Bitcoin and stocks. So, can you just comment on how these two asset classes um move together? And I asked this because going back to sentiment, sentiment for the crypto space right now appears to be rather weak compared to the sentiment in the stock market. The S&P is just reaching multiple all-time highs week after week. I talk to the junior mining guys all the time and the GEX is up 90% year to date. So, that sector is booming. It just seems like there's euphoria everywhere else. But um in a year when Bitcoin's up nearly 70%, interest is relatively muted. So let's just discuss this. Yeah, absolutely. I mean, interest is really low in crypto. Uh there's this social risk metric that we talked about before and it's really low right now. Like it's at historic lows and very different from what we saw in 2021 and 2017. Part of that could be due to diminishing returns. The other part of it could just be to the fact that altcoins didn't really move as much this cycle as as some of the prior cycles. And so like a lot of people hold, you know, they end up holding more altcoins. So, so if Bitcoin goes 700%, it doesn't mean that they're necessarily excited about that. But I think one of the things to think about with the S&P and and Bitcoin is that a lot of times Bitcoin is able to sniff out things, I think, a little bit quicker than the stock market is able to. And and just a great example of that is just look at 2023. Uh, Bitcoin was, you know, I mean, it it put in a high in in April and then it went to a slightly higher high in the summer, but by the time the S&P got into the I mean, it by the time it got into the meat of the correction, Bitcoin had already bottomed, right? Like Bitcoin basically found a low pretty early on in the correction by the S&P 500. and and then by the time the S&P was back at new highs, new at least new cycle highs, Bitcoin was already well broken out into new cycle highs. So, I think there's an element of Bitcoin is is able to uh sort of sniff things out a little bit quicker. It might feel like Bitcoin is lagging the S&P, but I would argue it's actually leading the S&P. And the other thing to to consider as well is that, you know, sometimes it feels like Bitcoin isn't doing as as good as the S&P, but remember from the low, the S&P is only up 90%. Which I mean, for the S&P, that's a great return in only a few years. Uh, but to put that in perspective, Bitcoin is up almost 700%. Right? So, when we talk about earlier, we talked about potentially a bare market in 2026, um, and maybe a 70% draw down. One of the reasons why Bitcoin tends to draw down more than the S&P. You might see like a 20% drop by the stock market. Often times that can lead to a much deeper correction by crypto because it went up so much more in the bull market, right? So again, it's not necessarily a negative thing. It's just that we have to regroup. We have to go through that same painful process um yet again. So you you could see I mean if the S&P is starting a correction right now uh back down, which I mean still remains to be seen so far. It just looks like it's still at alltime highs. uh but it would actually be in line with historical seasonality. If you look at the year-to- date return of the S&P 500 and you look at post all prior post election years going back to 1928, normally there's a capitulation a low in Q1 or early Q2 and then the stock market rallies for you know sort of the middle part of the year. It then tends to find a little bit of weakness in late September going into October and then you normally get one final rally uh into into the holidays. So if you overlay this year with the average, you can see that we are kind of extended from the average. And so if the stock market is finding a local top here in late September or, you know, or in the next week or so, it would actually be very timely and it would be it wouldn't necessarily be anything out of the ordinary. Um we we've seen this happen many many times. And just one last thing, even last cycle, we saw the same exact thing. We saw the S&P 500 find a local top and then it found a local low in early in early October. And then that that correction back to that 20week SMA then set up the final rally into the market cycle top. So you can see right now the S&P is nowhere near its 20we moving average. It'd have to drop about 5% to get there. Bitcoin is already there, right? Like Bitcoin is already at its 20week moving average. So that that's one of the reasons why if if the S&P does start to draw, Bitcoin could be weak a little bit longer, but Bitcoin could start to could could it could start to show strength before uh the S&P's correction is over if it if it's going to play out like it did say like in 2023 and and and 2024. Yeah, let's talk about let's let's finish off on Ethereum before I let you go. Uh Ben, so uh year to date, um I'm looking at my screen here. Ethereum's up about 25%. Bitcoin's up about 19%. Slight outperformance. It really started to outperform Bitcoin in the last six or couple months since July. What happened since July? Is that's just a a matter of Ethereum finally catching up to Bitcoin. In other words, playing catch-up or um is there an Ethereum specific narrative here at play? Yeah, it's an it's an Ethereum specific narrative. every time that Ethereum goes through its regression band, uh, it did it say in, you know, in 2015, it did it in 2016, um, 2019, 2025, right? Every time that Ethereum goes to its logarithmic regression band, uh, that's where the valuation of Ethereum bottoms against Bitcoin. And the the the ETH Bitcoin valuation here is this blue line. So, the reason that Ethereum was stuck in traffic on Struggle Street for so long was because the only reason it was going up from 2022 through early 2025 was because Bitcoin was lifting it up, right? Because you can see that the entire time it was going up, it was bleeding against Bitcoin. But when it broke down, it broke down in early 2025. It went home. it it sort of rinsed out all the all the the weak hands if you want to call it that and then now it has led to an explosive rally to alltime highs. So, my view was that after it goes home, it can then go to all-time highs. But I've also been pretty, you know, pretty open about after it hits the all-time high for the first attempt, it likely will get rejected, right? The first attempt will be rejected. And my guess is that what needs to happen now is every like every other time, uh, Ethereum will just check in with the 21week EMA sometime the next couple of months, um, just like it did the last couple of cycles. And when it does that, it will then go into its final rally for the cycle into the market cycle top. So you can see that happened in in late 2017. It happened in late 2021 and it very well could happen in late 2025 and then after it tags that 21 week EMA, you'll likely see another rally to all-time highs and then you'll have the 2026 bare market. But it's not I don't think that I I do think Ethereum has another rally left in it and I think it'll take it to alltime highs. Okay, very good. Um, and closing off, I do wonder how your um, modern portfolio theory um, allocation has shifted now that Ethereum has rallied significantly since the last couple of months. It's about 8020. Um, I think 8020. Yeah, it's about 8020 makes the most amount of sense right now. It's like 80% Bitcoin, 20% Ethereum for a crypto portfolio. You could obviously I mean I'm bullish on on the ETH Bitcoin valuation in general from here to the end of the cycle, but in the short term ETH is going to drop against Bitcoin. Um and and this was I mean we talked a lot about this on my channel that Ethereum would would hit a local top on its Bitcoin valuation when Ethereum hits an all-time high. Ethereum hit an all-time high the week of August 18th. That's exactly where ETH Bitcoin found a local top. My guess is that you're gonna have one more rally by ETH against Bitcoin, but it's not going to happen until early early November at the earliest. It would be my guess. So, watch for ETH Bitcoin to fall back in here to its 21week EMA. Uh, you know, sometime probably over the next 4 to 6 weeks and then after it does that, I think you'll see it get one final rally up to about maybe like 0.053 or so. Uh, and then that I'm not saying that has to be the top for ETH Bitcoin, but that's where that that'll probably be the top for me. All right, very good. Thanks very much. I appreciate your time, uh, Ben, and, uh, it's always good catching up with you. So, I'll put the link down below to where you can find, um, Ben's work and into the cryptoverse. Tell us what we can find there. Yeah, we just have a lot of charts. We have, um, you know, charts for crypto, precious metals, stocks, risk metrics, longer regression curves, all that other stuff, all that great stuff. Um, but again, you can just follow me on YouTube as well. Uh, and we go over this stuff on a daily basis. All right. And, um, and, uh, X as well. I'll put put your, uh, social media handle there. Thanks very much, Ben. Uh, good to see you and we'll talk again soon. Take care for now. Thanks for having me. Thank you for watching. Don't forget to like and subscribe.