Bitcoin Facing Potential Bearish Pattern as Analyst Warns of Similarities to 2019
A well-known crypto analyst has raised concerns that Bitcoin (BTC) may be following a bearish pattern similar to what was seen in 2019. Benjamin Cowen, who has a substantial following on YouTube with 887,000 subscribers, recently shared his insights on the potential correlation between Bitcoin’s current trajectory and the Federal Reserve’s monetary policy.
Cowen pointed out that there is a historical link between Bitcoin’s performance and the actions taken by the Federal Reserve. He highlighted the significance of the bull market support band, which is defined by the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA). According to Cowen, the struggles Bitcoin is facing to reclaim this support band mirror the challenges it encountered in 2019.
The analyst emphasized the impact of the Federal Reserve’s monetary policies, particularly during periods of quantitative tightening. He noted that Bitcoin’s dips below the bull market support band in 2019 coincided with changes in the Fed’s approach to monetary policy as economic conditions shifted. With the current economic landscape showing signs of weakness, including predictions of negative GDP in Q1 and concerns over inflation and tariffs, Bitcoin may continue to struggle to regain its bullish momentum.
However, Cowen also highlighted a potential scenario where Bitcoin could reclaim the bull market support band. He pointed to the S&P 500, which experienced a significant sell-off last week, as a key indicator to watch. If the S&P 500 stages a recovery in the coming weeks, Bitcoin could follow suit and make a push back towards the support band.
In terms of timing, Cowen suggested that Bitcoin’s rally back to the bull market support band would depend on when the S&P 500 finds a local low. He noted that historically, mid-March or early April are common periods for the S&P 500 to bottom out, which could signal a turning point for Bitcoin as well.
At the time of writing, Bitcoin is trading at $83,967, showing a 1.9% increase over the past 24 hours. As the market continues to react to economic conditions and monetary policies, investors will be closely monitoring Bitcoin’s movements to gauge its potential for a bullish resurgence.
In conclusion, while Bitcoin may be facing challenges reminiscent of the 2019 bearish pattern, there are still opportunities for the flagship cryptocurrency to recover and regain its bullish momentum. By keeping a close eye on key indicators like the S&P 500 and monitoring economic developments, investors can stay informed and make strategic decisions in the ever-evolving crypto market landscape.