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Closely followed crypto analyst Benjamin Cowen stated that Bitcoin (BTC) is highly likely to undergo a significant correction soon, based on its past price movements. The analyst considers a pullback of over 30% to be on the table for BTC.
Bitcoin’s 100-Week SMA and Fed Warning
Experienced crypto analyst Cowen, in his latest strategy session, pointed out to his subscribers that he is closely monitoring Bitcoin’s 100-week simple moving average (SMA). According to Cowen, whenever Bitcoin has risen above the 100-week SMA, it has tended to retest this average before continuing upwards. The analyst noted that BTC had risen above the 100-week SMA a few months ago, indicating a downside risk.
Cowen also emphasized that the actions of the Federal Reserve (Fed) will be decisive in determining whether Bitcoin’s price will find support above the 100-week SMA, saying:
“Historically, at this point in the cycle, and actually in later stages of the cycle, we have retested the 100-week moving average. This is something we acknowledge as appearing at a stage in the cycle. There was no harsh landing in 2016. You could argue it was a soft landing. We experienced a recession fear that many thought would happen, but it didn’t.
“We may not experience an inverted yield curve or something similar, but there were arguments that economies elsewhere in the world were slowing down and that this could happen in the US as well. But it didn’t, and Bitcoin essentially retested the 100-week SMA and continued to rise. However, in the last cycle, we retested it, experienced a bounce, but ultimately went into a decline.”
“So at some point, probably in the first few months of 2024, I think we will see some sort of retest of the 100-week moving average, and whether it continues will likely depend on whether the Fed achieves a soft landing or a hard landing like the last cycle.”
Current Bitcoin Status and the Possibility of $28,000
The largest crypto, Bitcoin, has seen a 0.40% increase in the last 24 hours, trading at $42,542. Data reveals that the cryptocurrency has fallen by 1.46% over the last 7 days, but has risen by 9.82% over the last 30 days.
At this point, it is worth noting that the 100-week SMA, which the analyst mentioned as due for a retest, is around $28,000. This indicates a potential 34.11% drop from the current prices, which is quite critical.
