Bitcoin could be on course to revisit the lows it touched in July, with one closely followed crypto analyst warning that the sell-off in US equities may still have room to run and that the macro backdrop increasingly mirrors the fourth quarter of 2018.
Benjamin Cowen, a longtime cryptocurrency market analyst, said in his latest market commentary that the post-election rally in US stocks has already begun to unravel, much as it did eight years ago. In 2018, equities climbed after the midterm elections before giving back those gains and sliding into a fourth-quarter rout that erased roughly 20% from US stock indexes, a drawdown that dragged an already weak Bitcoin lower with it.
His central argument rests on the Nasdaq, which he noted has started to retest the July trough it set earlier this year. If technology shares can return to that level, Cowen asked, there is no structural reason Bitcoin cannot do the same. He does not treat a return to the coin's prior low as an outlandish scenario, particularly if macroeconomic pressure persists.
"If Nasdaq can test its July lows, why can't Bitcoin?" Cowen said.
The analyst laid out three parallels between 2018 and 2026 that he says matter most for risk assets.
Note: Parallels as described by analyst Benjamin Cowen.
The first is monetary policy. In 2018, the Federal Reserve signaled it would keep raising rates even as economic growth showed signs of cooling. Cowen sees a comparable dynamic now, arguing that a Fed unwilling to soften its stance in the face of steep market declines would keep weighing on speculative assets like Bitcoin.
The second is trade policy. Corporate profit margins came under strain in 2018 as Washington and Beijing traded blows, and the analyst contends that today's wider application of tariffs could deliver a similar hit to earnings.
The third is regulation of the technology industry. Cowen suggested the difficulties that engulfed large tech companies in 2018 may be repeating in the artificial intelligence sector, with investment in that area vulnerable to shifting rules. He also pointed to geopolitical uncertainty stemming from the war in Iran and swings in energy prices, which he said make the current outlook more complicated than it was eight years ago.
Even so, the analyst was careful not to overstate the comparison. He explicitly declined to claim that 2018 will repeat itself exactly, and he offered no specific forecast for how far Bitcoin might fall.
On the longer-term implications, Cowen framed a sharp fourth-quarter decline as potentially constructive rather than purely destructive. Investors who have held bullish expectations through the year could end up abandoning them in a steep drop, a capitulation that he believes often occurs just before a new uptrend begins. A violent short-term sell-off, in other words, need not be a negative for the long-run picture.
For market participants, the takeaway is less about a single price target than about the sequencing of risks. Bitcoin has traded in tandem with technology stocks through much of this cycle, and the analyst's framework implies that the coin's near-term direction may depend more on Fed communication, Nasdaq momentum and global economic developments than on crypto-specific news. Investors watching only past halving cycles, he suggested, risk missing the macro signals that have driven the asset's sharpest moves.
The coming weeks will test the thesis: whether the Nasdaq's retreat toward its summer lows deepens, and whether Bitcoin follows it down to levels last seen in July.
