Prominent crypto analyst Benjamin Cowen has warned that Bitcoin (BTC) may soon undergo a significant correction based on historical price movements. Cowen suggests that a pullback exceeding 30% is a possibility for BTC. In his latest strategy session, he emphasized the importance of Bitcoin’s 100-week simple moving average (SMA), noting that Bitcoin tends to retest this average after surpassing it before continuing an upward trajectory.
Cowen also highlighted the influence of the Federal Reserve’s actions on whether Bitcoin’s price will find support above the 100-week SMA. He reflected on past market cycles, pointing out that Bitcoin has historically retested the 100-week SMA at various stages. He mentioned that in 2016, there was no sharp decline, but rather a ‘soft landing’ amidst fears of a recession which ultimately did not occur. Bitcoin retested the 100-week SMA and continued to rise, unlike the last cycle where it bounced back only to fall later.
The analyst predicts that at some point, likely within the first few months of 2024, Bitcoin will retest the 100-week SMA. Whether this leads to continued growth or a decline may depend on whether the Fed manages a soft landing or a hard landing similar to the last cycle.
Currently, Bitcoin has seen a slight increase of 0.40% over the last 24 hours, trading at $42,542. Data shows that the cryptocurrency has decreased by 1.46% over the past week but has risen by 9.82% over the last 30 days.
It is crucial to note that the 100-week SMA, which Cowen suggests may be retested, is around $28,000. This indicates a potential 34.11% drop from current prices, marking a critical juncture for Bitcoin’s future price trajectory.