A Potential Gut-Wrenching Correction Looms for Bitcoin, Says Analyst Benjamin Cowen
Crypto strategist Benjamin Cowen suggests that Bitcoin (BTC) may be on the verge of a significant correction. In a recent video update, Cowen explains that BTC has a historical pattern of retesting previous resistance levels as support before continuing its upward trajectory. However, he notes that Bitcoin did not retest the $30,000 level during its climb above $60,000, leaving room for a potential 50% drop in value.
Key Points:
- Cowen believes Bitcoin could experience a gut-wrenching correction due to the lack of support-building during its current rally.
- Bitcoin’s failure to test the $30,000 level as support may lead to a 50% drop in value.
A Possible 50% Drop for Bitcoin?
Cowen draws comparisons to Bitcoin’s previous price movements and highlights the importance of retesting breakout levels as support. He emphasizes that after surpassing these levels, BTC typically retraces and tests them again before continuing its bullish trend. However, Cowen points out that Bitcoin has not revisited the $30,000 range as support since breaking above it. This absence of support-building raises concerns about a potential 50% drop in value, similar to what occurred in 2019.
“Even for the people that like to use the 2016 analog, remember that after breaking out of these ranges, [Bitcoin] would then come back down and test it as support. The problem now is that this range there at $30,000, to drop from [current levels] is about a 50% drop. A 50% drop is exactly what we got in 2019.”
Bitcoin’s Unsustainable Rally
Cowen also expresses doubts about the sustainability of Bitcoin’s current rally. He observes that Bitcoin is continuously moving higher without establishing a solid support base. In typical bull markets, after breaking out, Bitcoin tends to retest its breakout level as support. However, Cowen argues that when Bitcoin stops testing support and enters a blow-off top phase, it often experiences severe corrections.
“I think the issue is that Bitcoin is not really building out any real support. A lot of times when you have these longer bull markets, after it breaks out, it likes to test it as support. Once it gets to the point where it’s not testing it as support anymore and it just goes into these blow-off tops, that’s when you get these nasty bear market corrections.”
Current Bitcoin Price
At the time of writing, Bitcoin is trading at $64,707 with a nearly 3% increase in the last 24 hours.
Hot Take: Brace Yourself for a Potential Correction
Crypto analyst Benjamin Cowen warns crypto enthusiasts to prepare for a potential gut-wrenching correction in Bitcoin’s price. His analysis suggests that BTC’s failure to retest the $30,000 level as support could result in a significant drop of around 50%. Additionally, Cowen highlights concerns about Bitcoin’s rally lacking substantial support-building, which may lead to severe corrections similar to past bear markets.
Key Takeaways:
- A gut-wrenching correction may be imminent for Bitcoin.
- Bitcoin’s failure to retest $30,000 as support may result in a 50% drop in value.
- The sustainability of Bitcoin’s rally is questionable due to the absence of a solid support base.
Disclaimer: The above references an opinion and is for informational purposes only. It is not intended as investment advice. Please do your own research.
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