Benjamin Cowen, a leading analyst in the cryptocurrency market, stated in his latest video that Bitcoin is at a very critical technical point and is facing a “Bear Market Resistance Band”.
Cowen compared Bitcoin’s current price movements to past periods, warning investors about the upcoming summer months.
Cowen argues that Bitcoin’s current rally is taking it directly into the bear market resistance band.
According to the analyst, this situation is not new; similar tests were experienced in 2014, 2018, and 2022. However, historical data shows that Bitcoin has struggled to turn this band into a permanent support during periods referred to as “midterm election years.”
One of the most striking points of the analysis is the inverse correlation between the energy market and Bitcoin. Cowen states that he expects energy inventories (XLE) to rise during the summer months, which could pose a “macro hurdle” for Bitcoin. According to the analyst, if energy prices rise, inflationary pressure will increase, which could lead the Fed to postpone interest rate cuts (loose monetary policy). Since crypto markets are dependent on liquidity and loose monetary policy, a delay in interest rate cuts could make the bullish scenario more difficult.
Although many investors compare the current market to the big rally of 2019, Cowen is cautious. Noting that the “digestion phase” following the 2019 rise lasted much longer than the current situation, the analyst believes it may still be too early for Bitcoin to enter a sustained bull market.
The analyst predicts that this struggle at the resistance band will continue for the next week or two, with a clearer picture emerging as we head into June. If Bitcoin fails to mount a strong rally towards its 200-day moving average, this will be seen as a sign of market weakness.
*This is not investment advice.
