Cryptocurrency analyst Benjamin Cowen has warned of a model that re-emerged before the previous three Bitcoin (BTC) halvings. The expert addressed the BTC halving process, cautioning investors.
Bitcoin Halving Process
Senior analyst Benjamin Cowen stated to his followers that Bitcoin always falls to the bull market support band in the first quarter of a halving year. The bull market support band, an indicator consisting of a 20-week simple moving average and a 21-week exponential moving average, is used to determine potential support levels for Bitcoin’s price during a bull market.
According to Benjamin Cowen, the leading cryptocurrency Bitcoin could lose value by double-digit percentage points from its current level if it tags the bull market support band. The expert stated the following:
In the February of the halving year, Bitcoin always tagged the bull market support band… It would represent a significant drop of about 15% from current levels.
Critical Support Level in Bitcoin
Expert Cowen mentioned that whether the bull market support band will act as a support level for Bitcoin or if BTC will fall below it depends on the state of the US economy, saying:
In the 2012 Bitcoin halving and the 2016 Bitcoin halving, we held this (bull market support band) as support. However, we did not hold it as support in 2020. We had the pandemic drop, a recession with a significant increase in unemployment… If the economy stays afloat, we might bounce from that level (bull market support band). If the economy doesn’t hold up and the Federal Reserve pushes us into a recession, then we might not stay afloat.
In conclusion, the crypto analyst warns that a pattern observed in previous halving periods for Bitcoin could repeat, indicating a risk of double-digit percentage losses if Bitcoin tags the bull market support band, and this situation is dependent on the state of the US economy.
