It has been revealed the fact that the actions that will be taken by the Federal Reserve could determine the future price moves for Bitcoin.
Bitcoin price moves are addressed
The crypto analyst Benjamin Cowen has recently stated that Bitcoin (BTC) might experience a significant correction soon, based on its historical price action. In a new strategy session, Cowen told his 788,000 YouTube subscribers that he is closely monitoring Bitcoin’s 100-week simple moving average (SMA).
According to Cowen, every time Bitcoin has crossed above its 100-week SMA, its price has tended to fall back down to retest it before continuing to rise.
Since BTC crossed above the 100-week SMA a few months ago, Cowen believes that there is a risk of downward movement if history is any indication.
The analyst also says that the actions of the Federal Reserve might determine whether Bitcoin will hold the 100-week SMA as support.
“Historically, sometime around this point in the cycle – and actually it’s occurred even later in the cycle as well – we’ve sort of retested that 100-week moving average.
It’s just something that we sort of acknowledge that does seem to be something that comes in at a phase in the cycle. In 2016, we didn’t have a hard landing. I guess you could argue that it was a soft landing. We didn’t even have a recession back then but we did have a recession scare where a lot of people thought there was going to be a recession.”
He continued and said:
“We didn’t really have an inverted yield curve or anything like that but there were other parts of the world where their economies were slowing down and I think there were some arguments that it could happen in the United States. [But] it didn’t, and Bitcoin basically retested that 100-week SMA and continued to move higher. Whereas last cycle, we retested it, got a bounce, but then ultimately fell through.
So I do think that at some point, probably within the first few months of 2024, we’ll see some type of back test of that 100-week moving average, and then the question of whether it holds or not will probably be dependent on whether the Fed achieves a soft landing or, if it’s a hard landing like the last cycle.”
