• Bitcoin (BTC) has seen a 15% correction from its 2023 high last month.
• Crypto strategist Benjamin Cowen warns that this downturn could be the start of a “secondary scare” pattern which has occurred every four years.
• According to Cowen, previous “secondary scares” have caused BTC prices to plunge by 39-83%, potentially reaching as low as $11,400 in a worst-case scenario.
Bitcoin Price Correction
Bitcoin (BTC) has seen a 15% correction from its 2023 high last month, signaling the potential for further downside ahead. Crypto strategist Benjamin Cowen warns that this downturn could be the beginning of a “secondary scare” pattern that occurs every four years.
Stock Market Performance
The S&P 500 stock index is down around 5% since the start of August and Cowen believes this is an important factor in understanding the current crypto market conditions. He says these historically significant corrections tend to lead to large drops in BTC prices, with previous scares causing prices to plunge by between 39-83%.
Potential Lowest Price Point
Cowen outlines three possible scenarios for how low Bitcoin could fall should this secondary scare take place: 40%, 61%, or 80%. A 40% drop would put BTC at $17,500; 61% would see it reach $11,400; and an 80% drop would send it much lower than either of those levels. At time of writing, Bitcoin is trading at $26,423.
Previous Secondary Scares
In 2019, once the secondary scare got underway and Bitcoin dropped below its 20-week moving average it fell another 61%. In 2015 there was roughly a 40% drop while 2011 saw an 82.5% decline before bottoming out. Each time these secondary scares have taken place after Q3 of pre-election year in the US stock market.
Conclusion
It remains unclear whether or not we are headed towards another significant price dip for Bitcoin but it’s important to note that historical patterns can provide valuable insight into future performance when looking at market trends like these.
