A widely followed crypto analyst is warning that Bitcoin (BTC) may see a 2019-style correction.
In a new strategy update, crypto analyst Benjamin Cowen tells his 788,000 YouTube subscribers that a Bitcoin price pattern that preceded a correction in 2019 may be playing out once again.
“If it does get that engulfing candle where it completely wipes away the losses from the prior week, and then we get a following move [this] week, the last week of December, then it would be setting up a very similar type of move that we saw back in mid-2019 just before the first [Fed] rate cut came in. That is something to think about. Will it play out in a similar manner, or will it not?”
His chart shows that in 2019, Bitcoin moved from about $13,000 to $9,167 after printing the pattern he describes. The chart also shows Bitcoin dropping to below $4,000 at around the time interest rates bottomed out in 2019.
Cowen also says that Bitcoin may reach a local high and then decline about a month before a Fed rate cut, just like in 2019. He says some people believe a Fed cut could come as soon as January, while more people are betting on a cut in March.
“One of the things we pointed out before is that Bitcoin’s local high was in, again it wasn’t a major high and it’s not like even after this 2019 high, we didn’t even go put in a new low, but this high came before the Fed started to cut rates. We’ve talked about this for probably well over a year. If we draw a line at the first rate cut that came in July of 2019, you can see that Bitcoin actually topped out just before the first rate cut, just before it, about one month before it.
Now, it’s anyone’s guess as to when the first rate cut is going to come. Some people say the Fed will start cutting in January. A lot of people think it’ll be in March. Of course, a lot of that will depend on how the labor market evolves between now and then.”
Bitcoin is trading for $42,524 at time of writing, down 2.4% in the last 24 hours.
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