A closely followed crypto analyst is assessing how the stock market will impact the price of Bitcoin (BTC) moving forward, as the top crypto asset begins to break its correlation with global markets.
In a new strategy session, Benjamin Cowen tells his 716,000 YouTube subscribers that while he expects the stock market to have a significant impact on the price of crypto assets, he highlights a new development that bodes well for BTC.
[adinserter block="1"]“One of the things that I think will probably dictate what crypto does to some extent is the stock market. What are the S&P and Nasdaq doing? What’s interesting to me is that the Nasdaq put in a lower low, but Bitcoin did not.
I think that looks pretty good for Bitcoin.”
According to Cowen, traders should monitor the performance of Bitcoin relative to the bull market support band as it can be a signal for altcoins to start rallying.
BTC’s bull market support band is currently hovering around $47,000. At time of writing, Bitcoin is trading at $44,109.
“The reason I care about it is because we know that the altcoin market behaves differently when we’re above it or below it. It doesn’t matter where it is, is the thing.
When Bitcoin was above it back in the summer of 2020, a lot of people made a lot of money. We were watching all sorts of altcoins just go flying off the rails.
People still made a lot of money even though Bitcoin was only $10,000. Why? Because it was above the bull market support band. When it’s below it, not a lot of altcoins did much.”
Looking closer at the correlation between Bitcoin and the stock market, Cowen divides BTC by the Nasdaq. Based on Cowen’s analysis, he expects BTC to steadily outperform the Nasdaq in the coming weeks.
“Bitcoin goes through these bullish phases against the Nasdaq as well as bearish phases.
Right now, we’re sort of at the bottom of this line, so hopefully, we’ll come back up to the top.”
The analyst is also keeping a close watch on Bitcoin’s bull market support band, a technical indicator that combines BTC’s 20-week simple moving average (SMA) and 21-week exponential moving average (EMA).
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