Bitcoin Drops Below $80K: Analyzing Cowen's Macro Roadmap

Bitcoin (BTCBTC-1.92%) recently slipped below the $80,000 mark, causing many market participants to take a closer look at macro economic trends. If you follow crypto analyst Benjamin Cowen, this price move might not come as a total surprise.

Cowen recently shared a nine-step macroeconomic roadmap outlining a potential fourth-quarter pullback for Bitcoin. Right now, two of those nine steps have already played out.

What Steps Have Played Out So Far?

To understand where this scenario comes from, let us take a look at the boxes that have already been checked on Cowen's list.

First, Bitcoin logged a weekly close below $83,000. Second, the market saw a 'fakeout' on October 25, where an upside price breakout quickly reversed direction.

The downward pressure continued as Bitcoin fell under $80,000 on Saturday. That rapid drop triggered approximately $191 million in long position liquidations across the market.

Past performance of digital assets is not a guarantee of future results. You can check current market data at bitkub.com/th/market/BTC.

The Upcoming Macroeconomic Events

The next phases of this roadmap rely on major economic reports rather than technical chart patterns alone. Here are the key events scheduled for this week:

• Fed Interest Rate Decision: Cowen's framework assumes the Federal Open Market Committee (FOMC) leaves interest rates unchanged at its October 28 decision, scheduled for 2 p.m. Eastern Time.
• PCE Inflation Index: On October 29, the Bureau of Economic Analysis (BEA) releases the September Personal Consumption Expenditures (PCE) price index. This path assumes a hotter-than-expected inflation reading.
• Rising Crude Oil Prices: Oil prices have climbed due to ongoing tension in Iran. Brent crude settled at $116.72 on Friday, and Cowen's outlook anticipates oil reaching near $120.
• Higher Treasury Yields: The 10-year US Treasury yield stood at 5.10% on October 15 according to the FRED database. Cowen projects this yield returning toward 5.3%.

Midterm Election Trends and Market Assumptions

Cowen's broader outlook suggests that if interest rates, inflation, and oil prices rise together, traditional stock markets could face selling pressure.

This environment could lead to a fourth-quarter decline in Bitcoin alongside falling long-dated yields before year-end. Cowen points to historical data showing recurring fourth-quarter pullbacks during US midterm election years.

What Could Invalidate This Roadmap?

Market roadmaps are theoretical scenarios built on specific macroeconomic assumptions. Cowen noted that his bearish perspective becomes completely void if Bitcoin reclaims $83,000 and holds above it.

If Bitcoin moves back above $83,000, it would indicate that buying demand is strong enough to overcome macro headwinds, potentially leading to price stabilization or further gains.

On the other hand, if inflation comes in hot and energy costs continue to rise, macro factors could exert continued downward pressure on crypto prices in the short term.