Veteran cryptocurrency analyst Benjamin Cowen has cautioned that Bitcoin could continue falling after its recent 15% decline from last month’s peak.
Cowen believes the latest crypto market downturn aligns with a 4-year cycle pattern tied to Bitcoin’s halving schedule. He points to the concept of “secondary fear” – where the S&P 500 typically drops in August/September of pre-election years.
The S&P 500 index has already fallen over 5% since early August. Cowen notes that during past secondary fear periods, Bitcoin has plunged between 39% and 83%. In 2019, a bearish candle pushed Bitcoin below its 20-week moving average, sparking a 61% decline. The 2015 and 2011 drops were around 40% and 80% respectively.
According to Cowen’s analysis, if history repeats, Bitcoin could find a bottom around $17,500 – a 40% drop from current levels. A 61% decline similar to 2019 would sink Bitcoin to $11,400. While an 80% crash can’t be ruled out, Cowen thinks that’s unlikely this cycle.
The veteran analyst believes Bitcoin is still susceptible to further downside as the crypto market enters the latter stages of its 4-year halving cycle. Investors should brace for heightened volatility and more potential drawdowns in the coming weeks and months. Past secondary fear cycles indicate Bitcoin may not find a definitive bottom until Q4 2022 or Q1 2023.
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