A closely followed crypto analyst says that a correction for Bitcoin (BTC) and the crypto markets is imminent.
In a new strategy session, crypto trader Benjamin Cowen tells his 921,000 YouTube subscribers that, based on historical precedence, a widespread market crash appears to be around the corner.
[adinserter block="1"]According to Cowen, Bitcoin appears to be following in the footsteps of its 2020 price action, when it witnessed a steep price drop, exploded to new highs and corrected in Q3 before a final leg up.
“In 2020, Bitcoin also had a big drop in Q1, kind of like it did [in April]; a big drop in Q1 and then it rallied and then it went sideways and kind of the same thing [recently]. It goes up and then it goes sideways. But what you’ll notice is that it didn’t actually tag the 20-week SMA (simple moving average) in the summer.
In July [2020], it didn’t actually tag it. It got really, really close to tagging it, but it didn’t actually tag it. And that’s exactly what happened [now]. It got really close to tagging the bullmark support band, but it didn’t actually drop all the way there. And then following that move, it then rallied up in July and August and then went sideways and then dropped in September.”
The trader notes that BTC can repeat the same pattern, expecting a market correction in September after going sideways for the rest of the month.
As to what could trigger a crypto market correction, Cowen predicts that an Ethereum (ETH) surge to new all-time highs will be met by exuberance, which savvy traders will use as an opportunity to take profits.
“Whenever Bitcoin goes back up a little bit, Ethereum will likely run to an all-time high. But then after Ethereum runs to an all-time high, what’s going to happen? Then the market drops to the 20-week moving average.
So, that’s how I think this is going to play out. Ethereum is going to try to consolidate just below the prior highs, and then probably in the next few weeks, it’s going to make that rally to a new all-time high.
When it does, it could correspond to potentially a [previous wick from 2020], where it wicks back up a little bit. That’s when Ethereum makes the all-time high. Then the market freaks out… Bitcoin drops, taking the market down with it… That’s how I think this is going to play out.”
Ethereum is trading for $4,452 at time of writing, a 4% decrease on the day while BTC is valued at $117,687
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