Bitcoin briefly slid below the $73,000 level, shaking an already fragile market and reigniting debate over whether the current pullback is just another mid-cycle scare or something more structurally concerning.
Key Takeaways
Bitcoin briefly fell below $73,000, testing a key cycle level.
Cowen says a bounce could bring short-term relief, while failure risks a rough midterm phase.
Glassnode data shows weakening liquidity and rising downside pressure.
While price action alone grabbed attention, the more important signals came from a combination of cycle analysis and on-chain data.
Midterm Pain Depends on the Bounce
Crypto analyst Benjamin Cowen pointed out that Bitcoin slipping below its April 2025 low is a critical moment for the cycle. According to his framework, the next move matters far more than the breakdown itself. A swift bounce could buy the market several months of stability, potentially allowing Bitcoin to drift toward late Q3 or early Q4 without severe damage – a period Cowen has repeatedly flagged as more constructive in past cycles.
If price fails to recover quickly, however, the risk is a prolonged and uncomfortable midterm year, similar to prior cycles where downside dragged on longer than most expected. Cowen also emphasized that bearish sentiment has been dominant for some time, which historically increases the odds of a countertrend rally. Still, he cautioned against trying to trade such moves, noting that relief rallies often arrive when few expect them, not when everyone is positioned for one.
Looking back, Cowen highlighted a key historical warning: in 2014, 2018, and 2022, once Bitcoin lost its 100-week simple moving average, price continued falling toward the 200-week SMA before meaningful relief emerged. His broader takeaway was clear – panic selling during mid-cycle drawdowns has rarely been the optimal strategy. From a cycle perspective, he continues to view late Q3 or early Q4 as a more favorable window for deploying serious capital.
Liquidity Thinning as Losses Mount
On-chain data from Glassnode adds another layer of caution. The firm’s Realized Profit/Loss Ratio, measured on a 90-day moving average, has been trending steadily lower and is now hovering around 1.5. This decline signals weakening liquidity conditions, with profit-taking losing momentum as market stress builds.
The Realized Profit/Loss Ratio (90D-SMA) continues to trend lower (~1.5), moving closer to 1, reflecting progressively thinner liquidity conditions.
A sustained break below 1 has historically coincided with broad-based capitulation, where realized losses dominate profit-taking… https://t.co/hI66GUNekV pic.twitter.com/BZkGl72rLm— glassnode (@glassnode) February 3, 2026
Historically, sustained breaks below a ratio of 1 have aligned with broad-based capitulation phases, where realized losses overwhelm profits across the network. While the metric has not yet crossed that threshold, Glassnode’s data suggests the market is moving closer to a zone where forced selling becomes more common, particularly if price weakness persists.
Bigger Picture: A Test of Patience
Together, Cowen’s cycle analysis and Glassnode’s on-chain signals paint a picture of a market at an inflection point. The brief drop below $73,000 may not define the cycle on its own, but how Bitcoin behaves around these levels will shape sentiment and positioning in the months ahead.
For now, the message from both perspectives is similar: conditions are difficult, liquidity is thinning, and short-term trading is increasingly risky. Historically, these environments tend to reward patience more than aggression – especially for investors focused on the bigger picture rather than the next few weeks of price action.
