The cryptocurrency market has always been an interesting and eventful world. Bitcoin (BTC) draws attention especially as the indispensable pioneer of the cryptocurrency world. Recently, popular analyst Benjamin Cowen stated that Bitcoin’s strong rise in early 2023 is reminiscent of a similar price movement in the past.
Cowen’s analogy dates back to Bitcoin’s 2015. In 2015, Bitcoin experienced a huge rise, doubling its price. However, there was a serious price collapse in the period following this rise. Cowen points out that the rise in early 2023 may result in a similar way.
“[2015’te] There was a 2x (2x) rally followed by a 50% decline. Today this is a 2x rally, not a 3x to 4x rally like we saw in 2019. More of a 2x rally.
“It is more similar to 2015 in terms of the size of the rally.”
Cowen warns that if Bitcoin repeats the bear market structure of 2015, it will witness a 50 percent decline.
“After you get this big 2x rally you move down and make a double bottom. Forget about these lower highs (new peak lower than the previous peak)…
But what if there are no bids (buys) when we break the low? What if Bitcoin breaks the $24,800 level and there are no offers? This became a problem, and that’s what happened when it broke down in 2015. There were no bids until the previous low was reached. It fell 50%… Today, [31.000 dolar] “A 50% drop from its peak would put Bitcoin back into a double bottom.”
Cowen’s warning came as Bitcoin showed a death cross formation on the daily chart. The term death cross is a term frequently used in technical analysis. When we see this term on Bitcoin charts, we usually perceive it as a sign of a negative price movement. This generally means that an asset’s short-term average price movement crosses its long-term average price movement downwards. This may indicate a downward trend in the market.
The analyst’s chart shows that BTC is in the early stages of a death crossover as the 50-day MA (white line) moves below the 200-day MA (orange line).
At press time, Bitcoin was trading at $25,933.
You can follow the current price movement here.