In a recent analysis, cryptocurrency analyst Benjamin Cowen has articulated a pivotal shift in the market dynamics surrounding Bitcoin. He suggests that the current macroeconomic environment, characterized by tight liquidity and subdued demand, is leading to tactical rallies rather than extended growth phases.
In his latest report, titled “Crypto Macro Risk Memo—Q1 2026,” Cowen asserts that both Bitcoin and the broader cryptocurrency market have transitioned beyond the primary growth phase typically observed in post-halving cycles. He emphasizes that the tight liquidity conditions are less conducive to new, sustained bull runs, instead favoring shorter, more selective price increases.
Cowen posits that Bitcoin has likely surpassed its peak from the 2023–2025 cycle. This peak, occurring in the latter part of the previous year, stood in stark contrast to the euphoric peaks of previous cycles, which were characterized by rampant retail interest and speculative behavior. Instead, the latest peak emerged amidst a backdrop of widespread apathy, with muted social engagement and speculative activity.
According to Cowen, this apathy-driven peak could result in more erratic declines rather than severe downturns, a trend that could prolong bear market conditions. He draws parallels to the 2019 market, where the declines were more contained compared to the extended downturns following previous peaks in 2017 and 2021.
The current economic landscape adds another layer of caution. Although signs of economic growth persist, Cowen highlights that this growth is insufficient to warrant aggressive liquidity support. He notes that historical patterns show Bitcoin often peaks ahead of monetary policy stabilization, with prices typically continuing to decline even after tightening measures have been eased.
Furthermore, Cowen warns that rallies in the post-peak phase face significant structural selling pressure. Long-term holders may capitalize on any short-term price increases by selling into strength, creating additional overhead supply. This scenario limits potential upside while leaving downside risks exposed.
His analysis underscores several key characteristics of the current market behavior:
- Market peaks have formed without widespread retail enthusiasm or speculative excess.
- Short-term rallies encounter selling pressure from long-term holders looking to take profits.
- Liquidity growth does not include the risk capital typically present in previous bull markets.
- The correlation between cryptocurrencies and equities remains weak and unpredictable.
- Current price movements favor tactical trading rather than long-term trend investments.
While the Federal Reserve”s balance sheet has shown signs of growth, Cowen argues that this expansion is primarily related to reserve management rather than the stimulus that traditionally sparks speculative risk-taking. Previous crypto bull runs were often catalyzed by emergency policy responses to acute economic stress, a scenario that is currently absent.
Cowen concludes that the cryptocurrency market is likely in a digestion phase akin to what was observed in 2019. While shorter-term rallies may occur, many assets could experience limited upward movement due to the prevailing structural constraints until liquidity conditions and market participation levels evolve.
