Cryptocurrency analyst Benjamin Cowen suggests that Bitcoin may have just avoided a major decline. According to Cowen's latest analysis, Bitcoin closed the weekly candle marginally above the critical bull market support band, even though it had briefly fallen below it. The bull market support band is commonly regarded as a crucial threshold that establishes whether Bitcoin is in a bearish or bullish phase.
According to Cowen's outlook, Bitcoin is likely to avoid a more significant retracement as long as it stays above this band. The 20-week simple moving average (SMA) and the 21-week exponential moving average make up the bull market support band, which is an important level that represents the overall sentiment of the market.
A wick below it last week, but #BTC closed the weekly candle slightly above the bull market support band https://t.co/PbcOtIaIES pic.twitter.com/KgLGEADfFe
— Benjamin Cowen (@intocryptoverse) October 7, 2024
Throughout past bull runs Bitcoin has frequently rebounded from this area, indicating that a correction is complete and that additional upward momentum is probably ahead. However, there are reasons for caution when interpreting Cowen’s optimism. Bitcoin has previously shown volatility in this band; wicks below these levels frequently cause traders to experience brief panic attacks.
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Regaining the band is a positive development for Bitcoin, but it does not necessarily mean a quick rebound. Given the macroeconomic unpredictability and comparatively low trading volume on the current market, it is possible that Bitcoin will encounter resistance in the upcoming weeks. Furthermore, as evidenced by recent price action, Bitcoin is still stuck in a range and has not been able to break above significant psychological barriers like $65,000.
A further risk that could affect risk assets, including cryptocurrencies, is the possibility of the Federal Reserve tightening its monetary policy. To sum up, even though Benjamin Cowen's forecast offers a bullish viewpoint, based on past performance around the bull market support band, it is crucial to exercise caution.
For a more convincing rally, Bitcoin must hold its current position above the support band, while the market continues to face external pressures.
