High-profile crypto analyst and trader Benjamin Cowen is discussing what a relief rally could look like for Bitcoin.
In a new update, Cowen says that if Bitcoin rallies in the coming period, it could bounce off the 50-week simple moving average (SMA).
Reflecting on historical price action, Cowen reasons that a bounce from the current level, which is just below $32,000, could allow Bitcoin to rise by 34% to 62%.
“Where could a bounce come? The 50-week [simple] moving average – we’ve had a bounce off the 50-week SMA many times in the past… If you go back to 2014, we had a bounce off the 50-week SMA. From the 50-week SMA, we went up about 62% or so.
In 2018, we had a bounce off of it. That year, we went up around 45%. In 2019, also sort of had a bounce. It flirted with that line for a couple of months, and then when we moved back up, we went up about 34%.”
Looking at Bitcoin’s history of bouncing off the 50-week SMA, Cowen says a relief rally could take BTC to higher price levels.
“If we do get a bounce off the 50-week [SMA], we can at least see prior moves did not have us putting in new all-time highs immediately. If we were to go up, say approximately [based on] the prior moves … a 34% move would take us back up to maybe $44,000. A 45% move would take us up to around $46,000… And a 62% move would take us up to around $52,000 or $53,000.”
Cowen says that, although a rally off the 50-week SMA could push Bitcoin above $40,000, he can also see Bitcoin building a larger base before igniting the next leg of its bull cycle.
“I think it’s important for the health of the market, in order for us to have a hope of ever going to $100,000, that we actually build out some decisive support at levels above $20,000, and so far, I don’t really think we’ve done that. The last time we held the bull market support band as support was at $10,000. I would like to see it at $30,000, that would be the most optimistic thing. But in order for us to do that, we need to spend some time. This has got to come back down…
A more bearish case would be we go to $20,000 or something… I think we need to hold it at support, for us to hold above $20,000 as support, above the 20-week SMA you could be looking at the end of the year. You could be looking at early next year before that happens.
So I would say be patient.”
l
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxCheck Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/gonin/MicroOne
