Analyst Benjamin Cowen believes Bitcoin (BTC) is about to enter a correction phase similar to prior market cycles as the crypto king teeters at $40,000.
In a new strategy session, Cowen tells his 789,000 YouTube subscribers that Bitcoin has historically experienced a massive market correction as it approaches the halving.
Every four years, Bitcoin undergoes a halving event, when miners’ rewards are cut in half. The next halving is expected in April.
According to Cowen, the pre-halving correction typically sees Bitcoin dropping to test the 100-week simple moving average (SMA).
“We’ve also tested the 100-week SMA around this timeframe, either the late part of that pre-halving year or the early phase of the halving year. We tested it right here [around November 2011] in that cycle, just before the halving year arrived. Two cycles ago [in 2016], we tested the 100-week SMA in January, February of the halving year.
And then last cycle [in March 2020] we tested it.
You can say, ‘Well, we only tested it because of the pandemic,’ but it’s happened to every cycle. And we even fell below it. Forget testing it. We went to the 100-week SMA and then we proceeded to fall another 45% from there last cycle…
Guess where that would put you today? A 45% drop below the 100-week SMA [at $28,176], that would put you back at the prior low [at $15,355].”
Bitcoin is trading for $40,004, down about 3% in the last 24 hours.
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