A widely followed crypto analyst says Bitcoin (BTC) bulls and bears are about to be demolished by an incoming fakeout.
In a new video update, crypto strategist Benjamin Cowen tells According to its 787,000 YouTube subscribers, BTC bulls and bears have often been devastated by a fake “death cross” during the year leading up to Bitcoin’s halving.
Bitcoin’s halving cycle occurs every four years and halves miners’ rewards. The next one is scheduled for April 2024, making 2023 a year before the halving
Says Cowen,
“What normally happens in the years before the halving, and I’ve said this many times, is we destroy the bears and the bulls. We destroy both sides and that way by the end of the year we are all sufficiently destroyed – whether you are a bull, whether you are a bear, it doesn’t really matter, everyone is destroyed…
If you just look at all three previous years before the halving, that’s what usually happens. We’re destroying both sides, and that’s why I think this will eventually go down the drain.”
According to Cowen, the reason both sides are going down is because BTC will witness a death cross that will deceive traders and investors. A death cross occurs when an asset’s 50-day moving average falls below the 200-day moving average, a sign that the asset could enter a more pronounced bear phase.
“What normally happens when [an asset] right before the death cross hits, it leads to people selling because they think, ‘Oh, there’s a death cross. That’s a bad thing.’ And then they sell it at the cross of death.
But the reason why that is often a bad strategy is because gold crosses and death crosses are, by definition, lagging indicators. They are based on moving averages, and moving averages are obviously lagging indicators…
When you see it [a] death cross and when you see it [a] golden cross, which often happens in the short term, is the opposite of what you expect in the short term.”
The crypto strategist further notes that during the years leading up to elections, the S&P 500 tends to undergo a seasonal correction, which puts BTC in a downtrend for the rest of the year – regardless of whether 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 undergo a seasonal correction in August and September of the election year, and what normally happens is that Bitcoin is in a downward trend. years regardless [how] the S&P 500 does.”
Bitcoin is trading at $27,031 at the time of writing, up fractionally over the past 24 hours.
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