Bitcoin Analyst Benjamin Cowen Predicts Incoming Fakeout for Bulls and Bears
Crypto analyst Benjamin Cowen warns that both Bitcoin bulls and bears are in for a rough ride as an impending fakeout looms. In his latest video update, Cowen explains that during Bitcoin’s pre-halving year, a fake “death cross” tends to wreak havoc on both sides of the market.
What is a Pre-Halving Year?
Bitcoin’s halving cycle occurs every four years, cutting miners’ rewards in half. With the next halving set for April 2024, 2023 is considered a pre-halving year.
Cowen states, “From pre-halving years, what normally happens, and I’ve said this many times, is that we wreck the bears and the bulls. We wreck both sides and that way, by the end of the year, we’re all sufficiently wrecked – whether you’re a bull, whether you’re a bear, it doesn’t really matter, everyone gets wrecked…”
Impending Death Cross Trickery
Cowen attributes the wreckage to a death cross that tricks traders and investors. A death cross occurs when an asset’s 50-day moving average falls below its 200-day moving average, indicating a potential bearish trend.
“But the reason why oftentimes that’s a bad strategy is because golden crosses and death crosses, by definition, are lagging indicators… When you see [a] death cross and when you see [a] golden cross, what tends to happen in the short term is the opposite of what you expect in the short term.”
S&P 500 Seasonal Correction Impact
In addition to the death cross phenomenon, Cowen highlights that during pre-election years, the S&P 500 usually experiences a seasonal correction in August and September. This correction often triggers a downtrend for Bitcoin throughout the rest of the year, regardless of how the stock market index performs.
Bitcoin’s Current Status
At the time of writing, Bitcoin is trading at $27,031 with a slight increase over the past 24 hours.
Hot Take: Benjamin Cowen’s Outlook on Bitcoin Bulls and Bears
According to Benjamin Cowen, Bitcoin bulls and bears should prepare for a challenging period ahead. The upcoming fakeout involving a death cross could wreak havoc on both sides of the market during Bitcoin’s pre-halving year. As a lagging indicator, traders and investors often misinterpret death crosses, leading to selling pressure. Additionally, the S&P 500’s seasonal correction during pre-election years tends to push Bitcoin into a downtrend for the remainder of the year. With these factors in play, it seems that both bulls and bears will face significant challenges in the near future.
This article was originally published on The Daily Hodl
By
By
By
By