Bitcoin’s Alarming Downtrend: Analyst Warns of Continued Underperformance Against Stock Market as Cycle Concludes

As Bitcoin’s price struggles near $83,000, prominent crypto analyst Benjamin Cowen delivers a sobering forecast: the digital asset may continue bleeding against traditional stock markets as the current market cycle concludes. This analysis emerges during a period of significant volatility across global financial markets, with investors closely watching the interplay between cryptocurrencies, precious metals, and equities.

Bitcoin’s Concerning Performance Against Traditional Markets

Crypto analyst Benjamin Cowen presented a detailed technical analysis on Thursday, suggesting Bitcoin’s relative weakness compared to stock indices might persist longer than many investors anticipate. Cowen specifically addressed widespread expectations within the crypto community regarding a “massive rotation” from precious metals into digital assets. He emphasized that this anticipated capital shift “probably isn’t going to happen” in the immediate future, challenging a popular narrative among Bitcoin maximalists.

Recent market data supports Cowen’s cautious outlook. According to CoinMarketCap, Bitcoin has declined 6.12% over the past 30 days and 7.78% over the previous seven days, currently trading around $82,859. Meanwhile, traditional stock indices have demonstrated relative resilience during the same period. This divergence highlights the complex relationship between risk assets in the current macroeconomic environment.

The Precious Metals Surge and Crypto Market Expectations

Gold and silver have recently achieved unprecedented price levels, creating speculation about potential capital rotation. Trading Economics reports gold reaching $5,608.33 per ounce and silver hitting $121.64, both representing all-time highs. Financial institution Citi further fueled precious metal optimism this week, predicting silver could climb to $150 within three months due to robust Chinese demand and a weakening US dollar.

Many cryptocurrency investors historically view precious metal strength as a leading indicator for Bitcoin performance. They anticipate that capital flowing into gold and silver will eventually rotate into digital assets perceived as alternative stores of value. However, Cowen’s analysis suggests this relationship may not materialize as expected during the current market phase. The timing and magnitude of such rotations remain subjects of intense debate among financial analysts.

Diverging Analyst Perspectives on Market Timing

While Cowen expresses near-term caution, other analysts present contrasting viewpoints regarding Bitcoin’s trajectory. Swyftx lead analyst Pav Hundal told Crypto News Insights that markets might be approaching a significant turning point. “We’re right on the cusp of where we’d traditionally expect to see re-risking back into Bitcoin,” Hundal explained, referencing historical patterns between precious metals and cryptocurrency markets.

Hundal provided specific historical context: “Bitcoin bottoms have historically lagged gold’s relative strength by about 14 months.” Based on this pattern, he anticipates potential rotation activity in February or March. “If history repeats, and it is a big if, the gold-Bitcoin dynamic points to a potential BTC bottom forming over the next 40 days,” Hundal added, emphasizing gold typically leads during macroeconomic stress before Bitcoin follows when risk appetite returns.

Broader Market Sentiment and Technical Indicators

Market sentiment metrics reveal widespread investor caution across cryptocurrency markets. The Crypto Fear & Greed Index, which quantifies overall market emotion, recently registered an “extreme fear” score of 16. This reading indicates significant investor apprehension and typically correlates with potential buying opportunities for contrarian investors, though timing remains challenging.

Several technical and fundamental factors contribute to current market conditions:

• Macroeconomic pressures including interest rate uncertainty and geopolitical tensions
• Institutional positioning with traditional funds adjusting cryptocurrency allocations
• Regulatory developments affecting market structure and investor confidence
• Technical resistance levels that Bitcoin has struggled to overcome
• Liquidity conditions across global financial markets

The Relative Value Perspective from Bitwise Research

Andre Dragosch, Head of Research at Bitwise Europe, offered additional context through relative valuation analysis. In a January 19 social media post, Dragosch noted Bitcoin “is trading at a steep discount to Gold on a relative basis.” He characterized this pricing relationship as an “asymmetric setup” that occurs infrequently in financial markets.

Dragosch suggested potential market inflection points, stating “if flows turn, Q1 2026 could be the inflection point.” This longer-term perspective acknowledges that while near-term headwinds exist, structural factors might eventually favor cryptocurrency assets. The divergence between short-term technical analysis and longer-term fundamental outlooks creates complex decision-making environments for investors.

Historical Context and Market Cycle Analysis

Understanding Bitcoin’s current position requires examining historical market cycles. Cryptocurrency markets have demonstrated recurring patterns since Bitcoin’s inception, though each cycle presents unique characteristics. The relationship between Bitcoin and traditional financial markets has evolved significantly, particularly following increased institutional participation.

Previous cycles show several consistent elements:

• Accumulation phases following significant corrections
• Parabolic advances driven by retail enthusiasm and media attention
• Distribution periods where early investors reduce positions
• Correlation shifts with traditional assets during different cycle phases

Current analysis focuses on whether Bitcoin is completing a distribution phase before entering a new accumulation period. The timing of this transition remains uncertain, with analysts divided on whether current conditions represent a buying opportunity or signal further downside.

Conclusion

Bitcoin faces significant challenges against traditional stock markets as analysts debate the digital asset’s near-term trajectory. Benjamin Cowen’s warning about continued underperformance highlights the complex dynamics between cryptocurrency and traditional financial markets. While precious metals surge to record highs, the anticipated rotation into Bitcoin remains uncertain, with analysts presenting divergent timelines and scenarios.

Market participants must navigate conflicting signals from technical indicators, macroeconomic factors, and historical patterns. The extreme fear sentiment reading suggests potential opportunity, but timing remains crucial. As the market cycle potentially concludes, investors should monitor multiple factors including institutional flows, regulatory developments, and broader financial market conditions. The Bitcoin-stock market correlation will likely remain a focal point for analysts throughout this transitional period.

FAQs

Q1: What does “bleeding against the stock market” mean for Bitcoin?
This phrase describes Bitcoin underperforming relative to traditional stock market indices. When Bitcoin loses value while stocks gain or declines more significantly during market downturns, analysts describe it as “bleeding” against equities.

Q2: Why do analysts compare Bitcoin to gold and silver?
Analysts compare these assets because all three serve as alternative investments outside traditional financial systems. Historically, some investors rotate between precious metals and cryptocurrencies based on risk appetite, inflation concerns, and macroeconomic conditions.

Q3: How reliable is the Crypto Fear & Greed Index for investment decisions?
The index provides sentiment context but shouldn’t dictate individual investment decisions. Extreme readings often signal potential turning points, but timing remains unpredictable. Professional investors combine sentiment indicators with technical and fundamental analysis.

Q4: What time frame do analysts consider for Bitcoin market cycles?
Bitcoin cycles typically span approximately four years, though duration varies. Analysts examine halving events, adoption metrics, and macroeconomic conditions when assessing cycle phases. Current analysis focuses on whether the post-2024 cycle is concluding.

Q5: How does the US dollar’s strength affect Bitcoin prices?
A stronger US dollar typically pressures Bitcoin prices, as cryptocurrencies often trade inversely to dollar strength. Conversely, dollar weakness may support Bitcoin valuations. Recent dollar movements against global currencies contribute to current market dynamics.