Popular crypto analyst Benjamin Cowen says one simple indicator with a history of calling Bitcoin bottoms is close to doing so again.
In a new strategy session, Cowen takes a look at the 20-week and 100-week simple moving average (SMA) combo on Bitcoin.
With both SMAs close to converging, Cowen points out that they’ve only ever crossed twice in Bitcoin history, both times marking the bottom of a BTC correction.
“There are two times in history, only two times, where the 20-week SMA crossed below the 100-week… and you might wonder, why does this matter, who really cares, they’re just moving averages, they’re lagging indicators blah blah blah. But let us look to see, was there any significance to the crossing of these two moving averages?”
While Cowen says the crossing of these two moving averages has always marked the bottom, it can also coincide with a further downward capitulation, which he has warned of before. Should the moving averages cross, he says that it would probably happen sometime late next month or early July.
“And so the question is, will the 20-week cross below the 10-week? If it does, historically speaking that actually ended up marking the bottom even if it was another 40% drop or something, but that’s what historically ended up marking the bottom, at least looking at it in this manner. Now, are they going to cross anytime soon?
Well, not in May, it’s more than likely not going to happen in May, it’s probably going to be a little bit of time here before they actually cross. If we were to extrapolate the current trend, let’s suppose they keep moving at the same rate they are, then it would happen in late June, or maybe early July.”
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