A widely followed crypto analyst is warning that Bitcoin (BTC) could undergo a sudden and massive correction.
In a new strategy session, Benjamin Cowen say His 850,000 YouTube subscribers claimed that the extension of the 20-week simple moving average (SMA) indicates bearishness in Bitcoin.
“If we look at the risk of a short-term bubble, which is also an extension of the 20-week moving average, we see that we are within the range of seeing some correction back to reality for Bitcoin.”
The analyst said a correction could push Bitcoin back into the bull market support band formed by the 20-week SMA and 21-week exponential moving average (EMA). This band currently covers a range of $72,000 to $80,000.
“Bitcoin could fall to the bull market support band. But remember last time it was just consolidating and waiting for the 20-week SMA to catch up. So that’s also the result. Yo”
Cowen also suggested that Bitcoin's correction could be more severe than many expected and could cause Bitcoin to retest the trend line that drops to the $60,000 level.
“One potential outcome I want to keep in mind in case that happens is to basically backtest this trendline again. It happens a lot with pairs and other random valuations, where you see a kind of breakout and then a backtest, and then it continues. There's always a chance that something like that could happen…
That's actually what happened last cycle. You basically had a lower tall structure. It eventually broke out, but was followed by a significant drop…
You can see something similar happening here. [in 2022-2023]there were some highs that Bitcoin had, then it broke out, went up here for a while, did some backtesting, then went up…
Something similar could happen and Bitcoin could spend more time here and even hit new all-time highs, but it could always end up backtesting this trend line. . ”
At the time of writing, Bitcoin was trading at $98,610, up 5.8% in the past 24 hours.
Check price action
follow me ×, facebook and telegram
Surf the Daily Hoddle Mix
 
Disclaimer: The opinions expressed on The Daily Hodl do not constitute investment advice. Investors should perform due diligence before making high-risk investments in Bitcoin, cryptocurrencies, or digital assets. Please note that transfers and transactions are made at your own risk and you are responsible for any losses you may incur. The Daily Hodl does not recommend buying or selling any cryptocurrencies or digital assets. The Daily Hodl is also not an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated image: Mid Journey
