A popular crypto analyst has successfully used a technical analysis metric to determine where the Bitcoin (BTC) price is heading as the markets struggle to recover from a rough patch.
In a recent strategy session, Benjamin Cowen told his 741,000 YouTube subscribers that he prefers to use Heikin-Ashi candles when analyzing Bitcoin price. According to the analyst, the metric in question provides a more comprehensive result on price action by including data from the previous two candles.
“Heikin-Ashi candles take into account not only the opening and closing price, but also the highs and lows, and they depend on the candles that preceded them. Therefore, it is a more useful way to measure the momentum of the market. It also helps you sort of cut through the noise of all short-term moves to the upside.”
Cowen examined the chart behavior of the Bitcoin price over the past few bear cycles and suggested that investors could see disappointing numbers until this fall.
“This is why I say people need to be prepared for this bear market to continue to drag on. […] We know that when we are in a bear market, things like the 200-day moving average start to remain as resistance, which is actually a pretty good indicator of a bear market.”
The crypto analyst pointed out the dates from its inception in 2011 when the Bitcoin price formed a back-to-back red candle pattern on 3-month candles over its lifetime.
“Let’s look at the quarterly Heikin-Ashi candles. Now that’s very interesting because if you look at the quarterly Heikin-Ashis, you can see a period where we were three reds in a row, a period when we were red four, another period when we were red four, and then two periods when we were red.”
So, to average all 13 candles, you divide by four, you get a value just over three. So you can argue that even the next quarter for Bitcoin may still come in the red. Oddly enough, the next quarter may be a green quarter, but there’s a chance it’s still red as Heikin-Ashi just carried over from the momentum of the previous quarter, so you have to remember that.”
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.