Cryptocurrency analyst Benjamin Cowen is warning that the US unemployment rate may have a significant impact on Bitcoin (BTC).
In a video update, Cowen tells his 814,000 YouTube subscribers that because of the historical correlation between employment data and risk assets, if the US unemployment rate continues to rise to close out the year Bitcoin may remain in a bear market.
“If it follows the [cycle] from 2000, the unemployment rate moving up by the end of the year, it could be at 4.8%, 4.9%. Now, if the unemployment rate is at 4.9% by the end of the year, it would lead me to believe that Bitcoin is still probably unable to break through the lower-high [price] structure…
Let’s look at one from the 1990s. In the 1990s, yes, there was a recession, but the S&P only dropped like 20%. It wasn’t nearly as bad. But even then the unemployment rate could still be 4.6% if it follows that.”
Cowen also says Bitcoin seems to be following a similar 2019 pattern when the flagship crypto printed lower-high and lower-low prices on the monthly timeframe before breaking out.
“This is one of those things where it’s going to be dependent on the labor market, I think. And I think it’s easy to sort of discount it and pretend like it doesn’t matter, but I would argue that a lot of the people that would argue that it doesn’t matter would have also said that Bitcoin was going to be $100,000 six months ago. If you guys remember back to March, so many people were not anticipating a 2019-style drop where it’s a painfully slow process of lower-highs, lower-lows where Bitcoin dominance goes up.”
Bitcoin is trading for $63,331 at time of writing, down 3.1% in the last 24 hours.
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