MarketsBitcoin
|4 min ReadTwo-Year Outlook: Bitcoin Enters Early Bear, US Stocks Still Climb
Maya Chen
Senior Analyst
Published
Jan 16, 2026
A veteran trader lays out a simple frame that has worked: cycle, liquidity expectations, and technicals. Add Elliott waves on top, and the map sharpens. The call is bold but grounded. Bitcoin has likely ended its classic four-year cycle and stepped into an early bear. Old altcoins ripping hard is the classic late-cycle tell. Yet the bear might be shorter than usual, because an AI boom in equities keeps risk appetite alive. Gold sits inside a generational shift in the global monetary order. While that transition runs, the metal keeps a long uptrend. U.S. equities still track the debt cycle.
Signals of overheating are emerging, but the cycle has not finished. Big tech and AI push hard. Bubbles form when no one wants to miss out. That is human, and it is how capital overbuilds. The base case for the next two years remains constructive.
Liquidity sets the pace before the tape confirms
Focus on U.S. liquidity. Recent government shutdown dynamics and ongoing balance-sheet runoff have pinched conditions. The SOFR–RRP spread pushed to pandemic-era extremes. That pressure likely explained part of the drawdown in both stocks and Bitcoin. The shutdown’s end improves the squeeze, and markets bounced on that expectation. But an improvement is not a new bull. It is a reset toward normal.
The outlook: balance-sheet runoff pauses soon, and balance-sheet expansion may restart afterward. That would materially ease conditions for both equities and Bitcoin, but it is still normalization, not a flood. The real flood arrives only if political control over the central bank drives large-scale easing. Think of that as the true liquidity catalyst. Near term, expect chop. Medium term, a gentle grind higher. Farther out, a bigger run if policy opens the spigots.
Bitcoin, gold, and U.S. stocks on the chart
Bitcoin. The coin sits in a large fourth-wave correction. With a steep second wave behind it, a sideways fourth wave is the classic path. That supports a range-bound view for the next few months. Cycle and liquidity signals also argue against a deep plunge. The bear may be a time correction more than a price collapse. The author has separate targets for the cycle low and the next cycle high; the stance here is that the structure does not favor aggressive downside while liquidity is stabilizing.
Gold. The metal is working through a pullback within a decade-long bull. Such a correction rarely ends in a few weeks. The secular shift in the monetary order and persistent central-bank demand limit the downside. A Fibonacci 0.382 retrace sits near 3100 as an extreme case. More likely, the drawdown finds a floor in the 3350 to 3750 zone. Investors who fear missing the next multi-year leg can consider entries below 3750 with a long horizon.
U.S. equities. This is the messiest piece. The structural up-cycle is not over, so dips are opportunities. An AI bubble is not only possible, it is probable. Will it burst? History says yes when credit and expectations outrun true returns. Watch three early warnings for topping: eye-watering acquisitions, inflation re-acceleration that forces tighter policy, and indiscriminate melt-ups in anything labeled AI with absurd multiples. You do not have to sell the instant these show up. You do have to raise your guard, bank gains on strength, and plan exits.
The trader’s scoreboard for the next two years
Cycle says Bitcoin’s four-year rhythm has broken and drifted into an early bear that may be shorter than past ones, thanks to AI-driven equity strength. Liquidity says normalization first, then potential expansion later. Technicals say Bitcoin ranges in a fourth wave, gold stays in a long secular climb after a healthy retrace, and U.S. stocks trend up until overheating signals flash. It is a beautiful, disciplined framework. Keep it simple. Respect liquidity. Let the tape confirm. And when the real money hose turns on, be ready.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.