A widely followed crypto analyst says that Bitcoin (BTC) bulls and bears are about to get demolished by an incoming fakeout.
In a new video update, crypto strategist Benjamin Cowen tells his 787,000 YouTube subscribers that BTC bulls and bears tend to get wrecked by a fake “death cross” during Bitcoin’s pre-halving year.
Bitcoin’s halving cycle occurs every four years and cuts miners’ rewards in half. The next one is slated for April 2024, making 2023 a pre-halving year
Says Cowen,
“From pre-halving years, what normally happens, and I’ve said this many times, is that we wreck the bears and the bulls. We wreck both sides and that way, by the end of the year, we’re all sufficiently wrecked – whether you’re a bull, whether you’re a bear, it doesn’t really matter, everyone gets wrecked…
Just looking at all three prior pre-halving years, that’s what usually happens. We wreck both sides, and that is why I think that this will ultimately fade into a lower high.”
According to Cowen, the reason for both sides getting wrecked is because BTC will witness a death cross that will trick traders and investors. A death cross happens when an asset’s 50-day moving average dips below its 200-day moving average, a sign that the asset could be entering into a more pronounced bear phase.
“What normally happens when [an asset] goes down right before the death cross hits, is it leads to people selling because they think, ‘Oh, there’s a death cross. That’s a bad thing.’ And then they sell into the death cross.
But the reason why oftentimes that’s a bad strategy is because golden crosses and death crosses, by definition, are lagging indicators. They are based off of moving averages, and moving averages are of course lagging indicators…
When you see [a] death cross and when you see [a] golden cross, what tends to happen in the short term is the opposite of what you expect in the short term.”
The crypto strategist goes on to note that during pre-election years, the S&P 500 tends to have a seasonal correction, which kicks BTC into a downtrend for the rest of the year – whether or not the stock market index goes up or down.
“We also know, and we discussed this back in July, that the S&P 500 tends to get a seasonal correction in August and September of the pre-election year, and what normally happens is it kicks Bitcoin into a downtrend for the rest of the year regardless of [how] the S&P 500 does.”
Bitcoin is trading for $27,031 at time of writing, a fractional increase during the last 24 hours.
I
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Generated Image: Midjourney
Shutterstock/PurpleRender
