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Cryptocurrency analyst Cowen discusses Bitcoin’s (BTC) summer drop and potential fourth quarter results.
Historically, Bitcoin BTC has peaked in the fourth quarter following the halving, suggesting a potential rally in 2025.
The key factors to watch are Bitcoin BTC’s BMSB, Fed policy, market sentiment, and the ETH/BTC ratio.
Bitcoin BTC plunged below the 200-day simple moving average to below $54,000. The price of Bitcoin BTC fell as Mt. Gox began to repay customers and the German government continued to sell its Bitcoin holdings.
As Bitcoin BTC experiences its expected summer slump, well-known cryptocurrency analyst Benjamin Cowen has repeatedly talked about Bitcoin BTC’s summer slowdown, during which the price of Bitcoin BTC tends to fall or stagnate. Now that this slowdown has arrived, Cowen is looking at what the rest of the year holds.
The big question is, can Bitcoin BTC climb back above the BMSB in the coming weeks, or will it continue to face resistance?
Analyzing Bitcoin’s Summer Slump
In a recent post, Cowen noted that Bitcoin BTC appears to have broken below the Bull Market Support Band (BMSB) in the summer of 2024. This is nothing new, and similar patterns have occurred in the past few years. For example, in August 2023, Bitcoin BTC fell below the BMSB, stayed there for a few weeks, and then rebounded strongly in the fourth quarter.
In 2013, Bitcoin hit a low in early July but quickly rebounded above the 21-week EMA, leading to a sharp rally in Q4. However, in 2019, Bitcoin BTC began to decline in the summer and fell below BMSB after the Fed cut interest rates, leading to further declines in Q4.
Cowen also mentioned that the ROI for Bitcoin BTC after the 2016 halving was similar to what it is now, which could mean we’ll see a similar pattern this time around. Historically, Bitcoin BTC tends to peak in the fourth quarter after a halving, which for the current cycle would be 2025.
Key factors to note
There are several key factors worth paying attention to that will affect the next move of Bitcoin BTC. One is whether Bitcoin BTC can re-break through the Bull Market Support Band (BMSB), which is a key level that determines its trend.
Another factor is the Fed’s policies, especially changes in interest rates, which can have a significant impact on the market. In addition, market sentiment as reflected by investor confidence and trading volume will also play a key role.
Finally, the performance of Ethereum ETH, and specifically the ETH/BTC ratio, is important as it exhibits similar patterns to past cycles.
What might happen in the fourth quarter of 2024?
Meanwhile, Cowen believes that Bitcoin's fate in the fourth quarter of 2024 depends on whether it can get back above BMSB. If it follows the patterns of 2013, 2016, and 2023, we may see a strong recovery and rally. But if it is similar to what happened in 2019, Bitcoin BTC may continue to struggle.
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