Bitcoin May Be Entering a Downtrend, Says Analyst
Crypto analyst Benjamin Cowen believes that Bitcoin (BTC) could be entering a downtrend based on one key indicator. In a recent strategy session, Cowen explains that the extension from the 20-week simple moving average (SMA) is showing bearish signals for Bitcoin. According to Cowen, the indicator suggests that Bitcoin may have reached a mid-cycle top. He points out that the previous three local tops occurred when the extension from the 20-week SMA reached around 40%. Cowen also highlights that historically, Bitcoin tends to print cycle tops when the extension touches its diagonal resistance.
Will History Repeat Itself?
Cowen shares a chart showing how BTC hit a mid-cycle top in 2019 when the indicator got close to its diagonal resistance. He notes that the current extension from the 20-week SMA is hovering near the long-term diagonal resistance, raising the question of whether this could be another mid-cycle top. However, Cowen points out that in 2019, Bitcoin didn’t hit the top value of the extension and suggests that it may not happen this time either. The peak extensions tend to correspond to significant tops in Bitcoin’s price.
Bitcoin Price and Conclusion
As of now, Bitcoin is trading at $39,365, experiencing a slight decline in the past 24 hours. While Cowen’s analysis raises concerns about a potential downtrend, it’s important to note that cryptocurrency markets are highly volatile and subject to rapid changes. Investors should carefully consider multiple indicators and factors before making any investment decisions.
Hot Take: Analyzing Bitcoin’s Mid-Cycle Top
Benjamin Cowen’s analysis of Bitcoin’s mid-cycle top provides valuable insights into the current market trends. By examining the extension from the 20-week SMA and its relationship to diagonal resistance, Cowen suggests that Bitcoin may be at a critical point in its price cycle. While history does not always repeat itself, it serves as a useful guide for understanding potential future movements. However, it’s essential to approach such analyses with caution, as cryptocurrency markets are highly unpredictable. Investors should conduct thorough research and consider various factors before making any investment decisions.
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