Bitcoin's 70% plunge forecast reveals deeper market maturity and hidden risks

Bitcoin is projected to experience a potential 70% drawdown during the next bear market, according to analyst Benjamin Cowen. His assessment is rooted in historical trends observed post-halving events, which have historically influenced Bitcoin's price trajectory. Cowen noted that in all post-halving years since Bitcoin's inception in 2009, a cyclical pattern emerges, characterized by gains in the summer, a dip in September, a peak in the fourth quarter, and a subsequent bear market.

Currently, Bitcoin is trading near its all-time high, having reached $122,321.1 on August 11 before consolidating to $120,178.37. Despite this bullish momentum, volatility metrics have significantly declined compared to previous years. For instance, the 30-day volatility index is at 1.10%, down from 8.26% in 2011. This moderation in volatility suggests a more mature market, but Cowen's analysis implies that this calm could precede a significant pullback.

The analyst's predictions align with historical patterns. For example, the 2019 bear market exhibited similar characteristics, including a drop below the bull market support band—formed by the 20-week simple moving average and the 21-week exponential moving average—during a period of Federal Reserve policy shifts. Cowen links this to the potential current situation, where rising inflation and economic uncertainties could trigger a similar dip.

Further complicating Bitcoin's future, Cowen also warned that Bitcoin's market dominance—its share of the total crypto market—may not return to its 2020 peak of 70%. He cited the growing influence of alternative cryptocurrencies and the maturation of the market as key factors. Presently, Bitcoin's market share stands at 57.36% as of the end of July 2025, and Cowen anticipates it may stabilize around 60% in the coming months. This shift reflects the broader adoption of altcoins and the evolving dynamics of the crypto market.

The macroeconomic environment also plays a crucial role in shaping Bitcoin's trajectory. The Federal Reserve's monetary policy and global liquidity levels are closely watched by investors, as Bitcoin has historically exhibited strong correlations with liquidity impulses and equity market movements. For instance, the price of Bitcoin has shown a positive beta to equities since 2020, meaning that it tends to respond similarly to broader market shifts. A potential tightening of monetary policy or a slowdown in global liquidity could trigger a bearish phase for Bitcoin.

Looking ahead, Cowen emphasized the importance of tracking institutional investment flows and the behavior of long-term holders (LTHs). For example, LTHs recently spent 97,000 BTC in a single day—a significant indicator of market sentiment and potential supply pressure. Such actions highlight the market's sensitivity to large-scale distribution and could foreshadow a bearish phase if the trend continues.

In summary, while Bitcoin has demonstrated resilience and continued institutional interest, historical patterns and current macroeconomic conditions suggest that a 70% drawdown is a plausible scenario in the next bear market. Analysts like Cowen are closely monitoring volatility, regulatory developments, and macroeconomic indicators to better understand the potential direction of Bitcoin's price. As the market continues to evolve, investors are advised to remain cautious and monitor these key variables to navigate the uncertainties of the crypto landscape.