Where bitcoin is likely to bottom in this midterm year

Bitcoin is stuck in one of its most painful bear markets yet. Prices are drifting lower, altcoins are bleeding out, and to make matters worse, traditional markets like the Nasdaq keep printing new highs. It feels like crypto is broken – but the data still points to a familiar four‑year pattern.

Why this bear market feels so brutal

On the surface, the current cycle looks unfair. Bitcoin has been trending down from its peak, while major stock indices and AI names melt up. That contrast makes the crypto drawdown feel worse than previous ones, even though structurally it still fits within a classic four‑year cycle.

Another reason it feels different: the recent bitcoin top was driven more by institutional flows than by retail euphoria. Social activity and retail participation stayed muted compared to 2017 and 2021. Instead of a blow‑off top full of hype, we saw what you could call an “apathetic top” – more like 2019, where price ran ahead of sentiment and then stalled.

The 200‑day moving average and the June "search for a low"

Historically, in midterm years (the second year of a US presidential cycle), bitcoin often rallies up to its 200‑day moving average and gets rejected before heading lower. That pattern showed up in:

• 2018 – rejection at the 200‑day MA, then a June low, followed by a later cycle bottom
• 2022 – same structure, with a June low very close to the final bottom
• 2026 – once again, a rejection at the 200‑day MA and a new leg down

In both 2018 and 2022, June produced a significant low, but not always the absolute bottom. A practical strategy that has worked in past cycles is to start dollar‑cost averaging (DCA) into bitcoin after that June low, accepting that you may be early but will be close in time to the eventual bottom.

Price levels that matter: 60k, 50k, 40k and the “terminal price”

Rather than obsessing over a single exact bottom, it’s more useful to think in ranges and scenarios.

One key reference is how bitcoin trades relative to its on‑chain cost bases, especially the realized price and balance price. Historically, major bear market bottoms have formed only after bitcoin dropped below both of these levels:

• Realized price – the average on‑chain cost basis of all coins; currently around $53k–$54k
• Balance price – a deeper value metric; currently around $39k

In past cycles, the final bottom sat below both lines. But each cycle has seen shallower dips relative to the balance price, and it’s possible this time bitcoin bottoms without fully revisiting that level.

That leads to a few key scenarios:

• Shallow sweep of 60k: If price only dips slightly below the prior ~$60k low and quickly bounces, odds increase that a deeper flush could still come later in Q4.
• Deeper capitulation to 50k–40k: A fast, violent move into the high‑40k or even 40k region – especially if it breaks below realized price – would look like classic capitulation. In that case, the risk‑reward would flip strongly bullish.
• Absolute floor: Based on on‑chain and cycle structure, the likely worst‑case range for this year is roughly $30k–$40k. There is no guarantee price has to go there, but if it does, that area historically has been where long‑term buyers step in aggressively.

If bitcoin ever trades near $40k in this cycle, the data suggests that being bearish at that point would be hard to justify from a long‑term perspective.

For more detail on how deep a flush could realistically get, see this breakdown of where bitcoin is likely to bottom and how bad the drop can get.

Timing the bottom: why October keeps coming up

Bitcoin’s four‑year rhythm is still the best working framework we have. When you measure past cycles from the halving lows, the market has tended to top and bottom within fairly tight time windows.

In this cycle, the top arrived within about a week of when previous cycles peaked in terms of days from the prior low. If that timing symmetry holds on the downside, the most probable window for the final bottom is around October.

The likely path from here looks something like:

• A meaningful low in June (possibly a major low, but not guaranteed to be the final one)
• A counter‑trend rally in July–August
• A final washout in Q4, potentially coinciding with a stock‑market correction

Even if the exact bottom lands in October, the market should start offering attractive long‑term entries from the June low onward.

If you’re weighing whether bitcoin could really revisit the 40k area, you may also find this look at a potential $40k bitcoin bottom in the context of the AI liquidity boom useful.

How stock markets and IPOs could trigger bitcoin’s bottom

Midterm years have a consistent pattern: US equities tend to see two notable corrections – one early in the year, and a second, often deeper one in the back half. That second leg down has historically lined up with bitcoin’s bear‑market bottom.

In 2014, 2018, and 2022, stocks sold off early, recovered, then suffered another 10–20% drop later in the year. It’s that second correction that usually marks the point where:

• Rate hikes and tight policy get priced out
• Markets start to anticipate easier monetary conditions
• Risk assets like bitcoin finally find a durable floor

This time, a wave of mega‑IPOs – especially a huge SpaceX listing and potentially other AI‑related offerings – could be the catalyst. As these companies join major indices, passive funds will need to rebalance, selling existing giants like Nvidia, Microsoft, and Amazon to make room. That rotation can quickly turn into a broader equity correction.

Once stocks wobble and the market stops talking about more rate hikes and starts talking about cuts again, bitcoin will likely be very close to its cycle low.

Why bitcoin is lagging while AI and stocks rip higher

The obvious question is: if AI stocks can make new highs in a tight monetary environment, why can’t crypto?

The answer lies in the risk curve and how different assets actually generate value. Many altcoins are effectively circular economies: they print new tokens, distribute them as yield to stakers, and rely on fresh capital to sustain prices. When money is cheap and liquidity is abundant, that game can work for a while. When rates are high and liquidity is constrained, investors become more selective.

We’ve already seen this “rolling down the risk curve” play out:

• Altcoins have bled heavily against bitcoin since 2023
• Now, with tight policy persisting, even bitcoin is bleeding against major stock indices
• Over longer timeframes, stocks themselves have been bleeding versus gold

In other words, capital has been steadily moving from higher‑risk to lower‑risk assets. As long as monetary policy stays restrictive and stock indices keep grinding up, bitcoin will likely struggle to outperform. When equities finally crack, the cycle should flip, and bitcoin can reclaim leadership.

Altcoins, dominance, and the role of stablecoins

Bitcoin dominance – its share of total crypto market cap – has dipped recently, even as majors like ETH, BNB, and SOL continue to trend down versus BTC. That seems contradictory until you factor in stablecoins.

In 2019, bitcoin dominance fell while bitcoin’s USD price also fell. It wasn’t because altcoins were in a healthy, sustainable uptrend against BTC; it was because stablecoin dominance was surging as traders moved to the sidelines in cash.

We’re seeing a similar pattern now:

• Stablecoin market share (USDT + USDC) has climbed sharply
• A handful of newer altcoins can spike and temporarily pull dominance down
• But the large‑cap altcoin complex remains in downtrends versus bitcoin

If you strip out stablecoins, bitcoin’s dominance is already near its previous cycle highs. That suggests the structural trend – altcoins losing ground to BTC – is intact, even if there are brief bursts of altcoin outperformance around local lows and early bull‑market phases.

Looking ahead, it’s reasonable to expect:

• Altcoins to remain under pressure as long as monetary policy is tight
• A short window near the eventual bottom where some beaten‑down alts briefly run harder than BTC
• Bitcoin dominance to spike again later in the next bull cycle when BTC makes its own parabolic move and traders rotate out of alts to chase it

Gold, silver, and the shift toward hard assets

While crypto struggles, gold has quietly been in a powerful bull market. The monthly RSI on gold recently hit extreme levels not seen since the 1970s – and back then, the ultimate top came years after the first overbought reading.

Several forces support a constructive long‑term view on gold:

• Rising geopolitical tension and uncertainty
• The likelihood of renewed money printing in future downturns
• Investors rotating away from speculative assets toward hard, non‑defaultable stores of value

Seasonality also matters. In prior midterm years, gold has often found a low in the summer and then trended higher into the back half of the year. Even after a parabolic run, that pattern could repeat: a period of consolidation and pullback, followed by another leg higher once macro conditions line up.

Silver tends to lag gold. The metal appears to be in a long consolidation band rather than a full reset. The most likely path is:

• Silver underperforms gold for the next 6–12 months
• Gold pushes to or near new all‑time highs
• Silver then gets “permission” to break out in a later, more explosive move – potentially in the 2028–2030 window

For investors, gold and silver are slow‑moving, multi‑year trades – not quick flips. They’re best thought of as long‑term hedges against monetary and geopolitical risk, complementary to a core bitcoin position.

Emerging markets and international diversification

Outside of crypto and US tech, some emerging markets are starting to look attractive on a relative basis. Latin American and other developing‑market equities have gone through their own cooling‑off periods and are now showing early signs of renewed strength.

While it rarely pays to bet against the US economy over the very long term, adding exposure to select international markets can:

• Diversify away from purely US‑centric risks
• Capture growth in regions that may benefit from commodity cycles, reshoring, or demographic trends
• Potentially outperform the Nasdaq from current stretched valuations, especially if AI leaders eventually cool off

For crypto‑heavy portfolios, a modest allocation to international equities can also help smooth volatility and reduce reliance on a single macro narrative.

Energy stocks as a high‑conviction macro trade

One of the clearest non‑crypto trades right now is energy. When you compare bitcoin’s performance to energy stocks (for example, the XLE ETF), bitcoin has historically bled heavily against energy in midterm years:

• 2014: BTC down ~51% vs energy
• 2018: BTC down ~66% vs energy
• 2022: BTC down ~77% vs energy
• 2026 so far: BTC already down ~46% vs energy

That pattern, plus the fundamental backdrop, makes energy compelling:

• Energy demand is unlikely to fall meaningfully without a serious recession
• In past cycles, energy stocks have topped after the broader stock market – often 6–18 months later
• As long as asset prices remain elevated and a deep recession hasn’t taken hold, energy companies can keep benefiting from strong demand and tight supply

The key risk to energy is a major global downturn. But you typically don’t get that kind of recession until after a sustained period of lower asset prices. Until we’re several months into a real equity bear market, the risk‑reward in energy remains attractive.

Putting it all together for your portfolio

For crypto investors trying to navigate the rest of this cycle, a few practical takeaways emerge:

• Expect volatility around a June low: Use that period to start or continue DCA into bitcoin rather than trying to nail the exact bottom.
• Watch Q4 closely: A second stock‑market correction later in the year – especially if triggered by liquidity‑draining IPOs – is a prime candidate for bitcoin’s final cycle bottom.
• Think in ranges, not single prices: The $50k–$40k zone, and especially any move below realized price, should be viewed as high‑conviction long‑term buy territory.
• Be cautious with altcoins: Many are structurally weak in a tight‑liquidity world. Short‑term rallies can happen, but the long‑term trend has been BTC taking share.
• Consider macro hedges: Gold, select emerging markets, and energy stocks can all play a role alongside a core bitcoin position, helping you ride out the rest of this bear market with more balance.

The current environment is uncomfortable, but it’s not unprecedented. If the four‑year cycle continues to hold, the coming months may offer some of the best long‑term entries you’ll see this cycle – provided you can stay patient, manage risk, and focus on data rather than noise.