New Bitcoin Alert Is Out – Correction Risk Ahead?

An analyst named Benjamin Cowen has issued a warning to traders about the risks involved in Bitcoin (BTC) trading.

According to Cowen, history indicates that the top cryptocurrency is at a high risk of correcting. In his latest strategy session, Cowen explains to his 784,000 YouTube subscribers that BTC usually breaks through its bull market support band during the first half of pre-halving years.

However, it then dips back below it in the third quarter. Cowen defines the bull market support band as a combination of the 20-week exponential moving average (EMA) and the 21-week simple moving average (SMA). He supports his argument by providing examples of BTC following the same pattern in 2011, 2015, and 2019.

“So we have three examples, which again you can’t necessarily extrapolate from, I’m not asking you to take it to the bank, but it’s just that normally, in the pre-halving, years we will see Bitcoin do well for a good portion of it, but then sometime around the third quarter, we see it fail to hold the bull market support band.

I think that is ultimately the risk that we have to consider: is it going to play out in a similar manner as it has the prior three pre-halving years? Does it fail to hold it, or will this be the first time that it actually holds as support?”

According to Cowen, if Bitcoin experiences a significant drop, it could also have an impact on other digital assets like Ethereum.

This is because many of these assets are already trading below their peak support levels. For example, if we examine Ethereum, we can see that in 2019, it fell below its estimated 20-week support level, which caused a downturn for the latter half of the year.

Stay tuned for more news on the crypto space and make sure to check out the markets as well.