Analyst Benjamin Cowen Predicts Major Bitcoin Correction
Crypto analyst Benjamin Cowen believes that Bitcoin (BTC) is on the verge of a correction phase, similar to previous market cycles. Cowen, in a recent strategy session with his YouTube subscribers, points out that Bitcoin has historically experienced significant market corrections as it approaches the halving event. The halving event occurs every four years and involves a reduction in miners’ rewards. The next halving is expected to take place in April.
Testing the 100-Week Simple Moving Average
Cowen explains that before each halving event, Bitcoin tends to drop and test the 100-week simple moving average (SMA). He provides examples from past cycles, where the cryptocurrency tested this support level. In 2011, just before the halving year, Bitcoin tested the 100-week SMA. In 2016, during the early phase of the halving year, it again tested this level. Even during the last cycle in March 2020, Bitcoin fell below the 100-week SMA and experienced a 45% drop from there.
The Potential Impact of a Correction
Cowen suggests that if history repeats itself and Bitcoin experiences another 45% drop below the 100-week SMA, it could bring its price back to around $15,355. Currently trading at $40,004, Bitcoin has already seen a 3% decrease in the past 24 hours.
Hot Take: Brace Yourself for a Possible Correction
Analyst Benjamin Cowen warns crypto enthusiasts to prepare for a potential correction in Bitcoin’s price. Based on historical patterns observed prior to halving events, Cowen suggests that Bitcoin may experience a significant drop as it tests the 100-week simple moving average. If this correction occurs, Bitcoin could fall by 45% from its current price, potentially reaching $15,355. It remains to be seen how the market will react in the coming weeks and whether Bitcoin will follow the historical trend.
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