Widely followed crypto analyst Benjamin Cowen says that Bitcoin (BTC), Ethereum (ETH) and the stock market are all facing the same hurdle.
Speaking in a new strategy session, Cowen looks at what he calls the bull market support band, which is a combination of the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).
According to Cowen, Bitcoin, Ethereum and the Nasdaq have all been rejected at the bull market support band.
“You can see that [Bitcoin is] facing resistance off of the bull market support band… This is actually what we’re seeing in a lot of different places. Go look at the Nasdaq. A similar story. Two wicks up to the top and then a pullback back to the downside. It also did not make it up to the bull market support band…
Ethereum, the same type of thing. We’re seeing this pattern play out across a lot of different markets. We also see it in the S&P. However, it did make it up to the bull market support band, and it actually had a very brief wick above it on two separate weeks.
So what are we seeing right now? We’re seeing a lot of resistance across broader markets, not just crypto. If you’re sitting here thinking that we’re off in our own little world, we’re not. Bitcoin and the cryptocurrency market very much remain a risk-on asset class.”
Cowen says that in order for crypto markets to regain bullish momentum, the equity markets need to start leading with some rallies. He says a big move to the upside in the stock market is likely what it’s going to take to put crypto bulls back in charge.
“Ideally, if we want Bitcoin to have any remote chance of having another go at the bull market support and without having to breakdown some market structure and then retry at lower levels, we would like to see in the coming weeks, for the stock market, to have a very large green candle.
I think a lot of people call it an ‘engulfing candle,’ where essentially holders or a lot of dip-buyers come in and just buy this thing up at the same level we held resistance at a couple of times in the past, and we just buy it up, and we end up putting in a strong candle back up.
In that case, the party can continue in the short term.”
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