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January 24, 2024

Bitcoin Mid-Cycle Top? Benjamin Cowen Says One Indicator Suggesting BTC Headed for Downtrend

By Daily Hodl Staff

Popular crypto analyst Benjamin Cowen says that one indicator suggests Bitcoin (BTC) may be entering a downtrend.

In a new strategy session, Cowen tells his 789,000 YouTube subscribers that the extension from the 20-week simple moving average (SMA) is flashing bearishness for Bitcoin.

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According to Cowen, the indicator shows Bitcoin may have reached a mid-cycle top.

“The last three highs, the last three tops that at least marked a local top for a while occurred around the time that the extension from the 20-week [SMA] reached this level [of about 40%]. So I still contend it’s an important level to look at.”

Source: Benjamin Cowen/YouTube

Zooming out, the analyst says that Bitcoin tends to print cycle tops when the extension from the 20-week SMA touches its diagonal resistance.

The analyst shares a chart that shows BTC hit a mid-cycle top in 2019 when the indicator got close to its diagonal resistance. Cowen says that history may repeat itself as the extension from the 20-week SMA is currently hovering close to the long-term diagonal resistance.

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“Now on a longer-term timeframe, one of the things I like about this chart is that the extension from the 20-week SMA when you’re in peak bull mania mode tends to have this diminishing volatility aspect to it, wherein the first cycle the extension from the 20-week SMA was a lot more significant. But as we go from one cycle to another, the extension isn’t as great. Now it sort of raises the question, well, will we hit it again this cycle?

It’s possible, but you can see that in 2019 a mid-cycle top value did not hit it. We got somewhat close, but we didn’t even hit it. And in fact, that extension is well above where we even currently are. You can see that the peak extensions, when they are hit, tend to correspond to much more significant tops, like all-time high tops for a long time. It raises the question is this top here [around June 2019] or is this one here [in January 2024] a mid-cycle top?”

Source: Benjamin Cowen/YouTube

Bitcoin is trading for $39,365 at time of writing, down slightly in the last 24 hours.

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