A popular crypto analyst has been correcting pretty hard for the past two days. Bitcoin (BTC) analyzed past BTC downtrends to identify a potential recovery timeline for
Speaking at a recent strategy session, Benjamin Cowen said that high-volume liquidations historically have had a support level and bitcoin priceHe stated that it indicates that the price may move upwards.
Cowen; He pointed to the ‘liquidations’ that also took place in December 2018, March 2020 and May 2021. Despite Bitcoin’s recent price drop, it doesn’t mean the massive capitulation needed to secure support from the next bullish move, according to the analyst.
“My philosophy at this point (which was the case throughout Q1) was that Q1 would be bearish, you have to assume that the downtrend will continue until proven otherwise.”
According to the analyst, the same retail investors who encouraged Bitcoin’s 2020 rally may have also encouraged the late summer and fall rallies we’ve had recently. The analyst expressed his opinion by using both on-chain (above metric) and ‘social metrics’.
“For a while, I think demand for Bitcoin from new market participants has been going for almost a year. We can’t say he left in November… You don’t see many new market participants buying Bitcoin at this point in the market cycle.”
Regarding what it might take for Bitcoin to wake up and move upwards, Cowen said in late 2019 and early 2020 what he calls “brick walls” and a BTC rallyA market followed by a market trend change highlights previous red candlestick trends.
“Now we’re basically just looking for another wall to hit, things will get better when the volume gets so high and we liquidate everyone who wants to be liquidated, and then we can actually start to see a healthier market.”
Cowen added that no one knows for sure when such an event might occur, but he is confident that Bitcoin will regain positive sentiment in 2022.
“I don’t think the whole of 2022 will be in a downward trend. I think Q1 will be a red quarter and maybe Q2 will be a red quarter. But later in the year, I think we will see things turn around.”
At the time of writing, Bitcoin is down over 10% on the day and is trading at $36,442.
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.