Historical Patterns of Bitcoin Drawdowns
Throughout its history, Bitcoin has experienced severe declines after reaching new all-time highs. Past bear markets recorded drawdowns of 94%, 87%, and 77%. These steep declines highlight the volatility inherent in the digital asset market. Analyst Benjamin Cowen stresses that while another 70% drop is not inevitable, history suggests it remains a possibility investors should not dismiss.
Cowen’s Bear Market Warning
In a recent interview, Cowen outlined his perspective on potential risks for Bitcoin’s future. He suggested that a 70% drawdown from whatever high Bitcoin achieves in this cycle remains realistic. According to him, markets often repeat cyclical behaviors, and investors should be cautious of euphoric rallies that precede major corrections.
Recommended Article: Bitcoin Price Slips Below $115K After Fed’s Rate Cut Decision
Impact of a Potential $250,000 Peak
Some bullish forecasts, including those from BitMEX co-founder Arthur Hayes, suggest Bitcoin could climb to $250,000. If such a peak occurs, a 70% decline would bring the price down to around $75,000. Cowen emphasized that this scenario, while speculative, is in line with prior cycle behavior and reinforces the importance of profit-taking strategies.
Timing and Strategy for Investors
Cowen advised that if Bitcoin surges significantly in late 2025, it might be wise to secure profits before a downturn. He personally expects to wait until mid-2026 to consider re-entry into the market. This cautious approach underlines the cyclical nature of crypto markets, where timing often makes the difference between major gains and steep losses.
Current Bitcoin Market Trends
At present, Bitcoin is trading above $117,000, marking a 3.41% increase over the past 30 days. Over the last 12 months, it has surged by more than 88%. Despite this strong performance, Cowen urges market participants not to underestimate how quickly the cycle top could be reached and followed by a sharp correction.
The Role of Investor Sentiment
Cowen explained that investor optimism tends to peak just before markets reverse. Euphoria can cloud judgment, making it difficult to recognize when Bitcoin has hit its top. He warns that during parabolic moves, most investors will be too focused on potential gains to see the risks. History shows these emotional highs often precede significant declines.
Ethereum’s Expected Outperformance
Beyond Bitcoin, Cowen predicts Ethereum will outperform toward the end of the current cycle. Although ETH may appear weak compared to BTC in the short term, Cowen believes that heading into the cycle’s close, ETH will gain relative strength. The ETH/BTC ratio has already climbed more than 8% in the past month, reflecting early signs of resilience.
Divergent Views Among Analysts
Not all experts agree on Bitcoin’s trajectory. Bitwise CIO Matt Hougan expressed optimism for strong years ahead, particularly in 2026. Canary Capital’s Steven McClurg projected Bitcoin could reach $140,000 to $150,000 before a potential downturn. Meanwhile, MicroStrategy’s Michael Saylor dismissed fears of another severe winter, insisting that long-term adoption will sustain Bitcoin’s growth.
Preparing for the Next Market Cycle
Investors face a divided landscape of bullish and cautious predictions. Whether Bitcoin follows historical patterns or breaks new ground, risk management remains essential. The possibility of a 70% decline may not be certain, but preparing for volatility is critical. As the market edges closer to its next peak, the balance between seizing opportunities and protecting gains will define investor success
