A widely followed crypto analyst warns that Bitcoin (BTC) may suddenly undergo a massive correction.
In a new strategy session, Benjamin Cowen tells his 850,000 YouTube subscribers that the 20-week simple moving average (SMA) extension is showing a bearish trend for Bitcoin.
“If we look at the short-term bubble risk, which is also just the extension of the 20-week moving average, we can see that it is in that range where you can find some of these corrections where Bitcoin comes back to earth.” . .”
Source: Benjamin Cowen/YouTube
The analyst says a correction could send Bitcoin back to the bull market support band, which is formed by the 20-week SMA and the 21-week exponential moving average (EMA). The band currently covers the range between $72,000 and $80,000.
“There is a chance that we will see Bitcoin fall to the bull market support band. But remember that last time you just consolidated and waited for the 20-week SMA to catch up. So that is also a result.”
Source: Benjamin Cowen/YouTube
Cowen also suggests that a Bitcoin correction may be more severe than many anticipate, potentially retesting a trend line that would send BTC into the $60,000 range.
“I also want to put a potential outcome on your radar in case it happens, and that is basically retesting this trend line. We’ve seen that pattern happen a lot with alt/Bitcoin pairs and other random valuations where you’ll see some sort of breakout and then a backtest, and then it continues. There’s always a chance something like this could happen…
Actually, that’s what happened last cycle. You basically had a kind of lower and taller structure. In the end you had a breakup, followed by a major fall…
You can see something similar happening back here. [in 2022-2023]there were a couple of lower highs that Bitcoin had and then it broke out, it was here for a while, it tested it and then it went up…
“There is a chance that we will see something like this happen, where Bitcoin, maybe even spends more time here and maybe even sets a new all-time high, but eventually it could always retest this trend line.”
Source: Benjamin Cowen/YouTube
Bitcoin is trading at $98,610 at the time of writing, up 5.8% in the last 24 hours.
Image generated: Halfway through the trip
