A widely followed analyst is warning of a possible Bitcoin (BTC) correction in early 2025 as the flagship crypto asset enters its first post-halving year.
In a new video update, crypto strategist Benjamin Cowen tells his 853,000 YouTube subscribers that Bitcoin may correct by double-digit percentage points in January based on historic precedence.
“At least in the last two [post-halving years], there has been a correction in January. Now what’s interesting is this time we’ve already kind of had a correction in December, but if you look at what happened in 2021, there was a correction in January, about a 30% drop. If you look at 2017, the post-halving year in January there was also about a 30% drop.”
However, Cowen says Bitcoin’s December correction may have been caused by the anticipation of the historic January correction and therefore Bitcoin may not correct this month.
“But the counterpoint, of course, is that Bitcoin was not really struggling at the end of December [in the prior two instances]. It was actually going up [in December 2016] and then you had a drop in January. Same thing again in 2021. This time has been a little bit different in that regard as it’s bled in December rather than having gone up. So obviously the optimist would say, Well, maybe it’s just front-running the correction because everyone’s talking about it happening in January; therefore, why not it happen in December?
If you look at a price range here [in December 2024], it’s already dropped around 15%. A 30% drop would actually put it right around the 20-week moving average [at $77,712]. So the optimist would certainly look at that and say, Maybe it’s just front running what everyone was already knowing was happening so by the time it actually happens, Bitcoin already carried out that move.”
Cowen also suggests Bitcoin may have headed lower in December based on its historical correlation with the rate for 10-year yields (US10Y).
“The other way to think about it is if there’s something inhibiting Bitcoin from going higher, and again it could just simply be due to the big rise in in the yields over the last couple of weeks. We didn’t see moves exactly as strong as this in prior Decembers of halving years by the 10-year yield. If you were to overlay the 10-year yield onto this chart the 10-year yield has never really been this high at this point in in Bitcoin’s history. And so that could be the reason.”
Bitcoin is trading for $94,584 at time of writing, up 1.2% in the last 24 hours.
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