A popular crypto analyst is looking at historical Bitcoin (BTC) trends as well as the US stock market to determine when the cryptocurrency might regain some positive momentum.
In a new strategy session, Benjamin Cowen tells his 705,000 YouTube subscribers that steep corrections like the one Bitcoin has experienced since reaching an all-time high above $69,000 last November can’t be expected to flip overnight.
“You should assume, based on history, anytime Bitcoin’s closing below the bull market support band, you should just assume that it’s going to be a few months before we can realistically have a shot at getting back above it…
I would say three to six months is usually a realistic timeline on actually having a shot to get back above it… We have below it for about nine weeks. We are currently in our ninth week, so a realistic time frame for getting back to the top, the conservative estimate would be three weeks… And that would basically be a best-case scenario.”
The bull market support band is a market indicator derived from the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA). The band is currently hovering between $45,000 and $50,000.
Cowen adds that his best-case scenario for Bitcoin might materialize if the US equity markets rally for an extended period of time.
“What we would assume for that to happen, we’d have to see stocks be green for a few weeks. As much as we like to think that we live in a bubble where crypto does its own thing, it’s not true.
If we see the Nasdaq and the S&P continue to drop, rest assured that Bitcoin will also very likely drop as well. And it doesn’t necessarily mean there’s anything wrong with Bitcoin. Nothing’s changed fundamentally, but it might just mean that people are continuing to shift to be a little bit more risk-off rather than risk-on…
It’s not just Bitcoin. It’s everything that’s not cash.“
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Source: https://dailyhodl.com/2022/02/01/bitcoin-will-need-help-from-the-stock-market-to-kick-off-reversal-according-to-crypto-analyst-benjamin-cowen/