Since the beginning of the year, Bitcoin (BTC) has risen over 160%, and different interpretations continue to emerge. Crypto currency analyst Benjamin Cowen, who is closely followed by investors, warned that BTC could face a collapse similar to the one in 2019.
Bitcoin Could Crash as It Did in 2019
Crypto currency analyst Benjamin Cowen, in his latest analysis session on his YouTube channel, told his subscribers that the price formation seen before the major drop in 2019 could emerge once again. He emphasized that this is a serious drop formation, saying:
If the engulfing candle that completely erased the losses of the previous week is going to close and then we see a move in this direction in the last week of December, then a chart structure very similar to what was seen just before the first Fed interest rate cut in the middle of 2019 will have formed. This is a situation that needs to be considered: Will a similar move come, or will it not?
Cowen’s chart, pointing to 2019, shows that after the formation he indicated, the price of Bitcoin dropped from about $13,000 to $9,167. The chart also shows that the largest crypto currency dropped below $4,000 during the period when interest rates bottomed out in 2019.
Fed Interest Rate Cut and Bitcoin
Cowen also continued his warnings by stating that Bitcoin could fall about a month before the Fed interest rate cut, just like in 2019, after reaching a local peak. The analyst mentioned that some believe the Fed could go for an interest rate cut in January 2024 after a long period of rate hikes, while the majority think the cut will start in March, saying:
As I mentioned before, Bitcoin’s last local bottom level was not deep enough and does not even correspond to a new bottom level after the bottom in 2019. The peak formation at that time had come before the Fed started to cut interest rates. We have probably been talking about this for over a year. When we draw a line to the first interest rate cut in July 2019, we see that Bitcoin actually peaked about a month before the first rate cut.
Now, when the first interest rate cut will come is a subject everyone is trying to predict. Some say the Fed will start cutting rates in January. The majority assess that the rate cut will come in March. Of course, a large part of this will depend on how the labor market situation develops between now and then.
