A popular crypto analyst is warning that Bitcoin (BTC) may be repeating a similar 2019 bearish pattern for one key reason.
In a new YouTube video, Benjamin Cowen tells his 887,000 subscribers that a historic correlation between Bitcoin and Fed monetary policy suggests the flagship crypto asset may struggle to reclaim the bull market support band, as it did in 2019.
The bull market support band is formed by the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).
“I think the reason why that 2019 comparison comes back to haunt Bitcoin fairly frequently is because of the monetary policy by the Federal Reserve. Remember, during 2019 there is also this ongoing quantitative tightening, which is also what we’ve seen this cycle as well…
These moves right here below the bull market support band [in September-December of 2019] they basically occurred as the Fed pivoted monetary policy as the economy weakened up a little bit. Recently, we have seen the Atlanta Fed come out and sort of give out predictions for negative GDP in Q1. We’ll see if that holds or not. But you couple that with inflation, inflation concerns, tariff concerns and whatnot, and you get these drops below the bull market support band.”
Source: Benjamin Cowen/YouTube
However, Cowen says that Bitcoin may reclaim the bull market support band if the S&P 500 recovers after last week’s massive stock sell-off.
“Now, again, we talked about how the S&P would likely find weakness between February OPEX (options expiration) and March OpEx. The best-case scenario for the S&P, in my opinion, is that the local low has already occurred. There are plenty of examples in Marches where about mid-March is where the local low occurs. Sometimes it takes until about mid-April.
If you’re trying to figure out when could Bitcoin get a rally back up to the bull market support band, it’s going to depend on whenever the S&P 500 finds a local low. Does it continue to show weakness until the end of March or early April? Or does it find that strength sooner? And I think that’s ultimately what’s going to dictate the amount of time it takes for Bitcoin to get that move back up.”
Source: Benjamin Cowen/YouTube
Bitcoin is trading for $83,967 at time of writing, up 1.9% in the last 24 hours.
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