Expert Analyst Identifies Critical Level for Bitcoin: “It Shouldn’t Close the Week Below This Level”

Crypto analyst Benjamin Cowen stated that Bitcoin’s recent strong performance despite macroeconomic pressures did not align with his expectations, adding that the market seemed to have “reversed” its course.

In his latest analysis, Cowen stated that he expected the rise in energy prices, bond yields, and the dollar index to normally put pressure on Bitcoin and other risky assets, but Bitcoin has proven much more resilient to these macroeconomic conditions than anticipated. The analyst explicitly acknowledged that Bitcoin surpassing its May peak has invalidated his previous predictions.

According to Cowen, the current macroeconomic picture generally continues to support his thesis. He noted that rising energy prices have driven up long-term bond yields, with the US 10-year Treasury yield reaching 5.1 percent. Cowen also argued that the Fed’s policy interest rate remains below market expectations.

The analyst noted that the 2-year US Treasury yield has risen to approximately 4.9%, while the Fed’s policy rate remains at 4%, suggesting that monetary policy may not be tight enough to control inflation. According to Cowen, rising energy prices, bond yields, and the dollar are already putting pressure on stocks and precious metals.

Cowen, however, noted that Bitcoin presents a different picture, therefore describing the current environment as an “inverted” market. The analyst stated that the S&P 500 has struggled to produce new highs in recent weeks, and gold and silver have also come under pressure due to rising interest rates and a strong dollar, but Bitcoin continues to show resilience against these same macroeconomic factors.

One of the technical indicators that Cowen drew attention to was Bitcoin trading above its 50-week moving average. The analyst noted that the “golden cross” pattern in Bitcoin, followed by a pullback and then a rise, resembled some recovery cycles in the past, and that the current technical structure suggests the market may have regained strength.

Cowen considers Bitcoin’s rise above its May peak particularly significant. According to the analyst, the fact that Bitcoin has formed a higher peak here necessitates a reassessment of expectations, even if a potential pullback occurs in the final quarter of the year. Such a correction could potentially form a higher low instead of falling below previous lows.

The analyst also admitted that Bitcoin’s current rise has proven his previous predictions wrong. Cowen recalled that a few weeks ago he had assessed the probability of Bitcoin hitting a bottom at only 35 percent, while giving a 65 percent chance of a new bottom. However, he said that with Bitcoin rising above its May peak, these probabilities have shifted in favor of the market’s bullish outlook.

“Bitcoin Should Not Close Below $83,000”

However, Cowen doesn’t think the uptrend is fully confirmed yet. According to the analyst, continued weekly closes above current levels could increasingly strengthen the thesis that Bitcoin has passed its bottom. Conversely, a renewed weekly close below $83,000 could bring about a new correction scenario in the fourth quarter.

Cowen emphasized that even in such a scenario, Bitcoin doesn’t necessarily need to form a new low. The analyst noted that a potential pullback could develop as a “higher low” on the long-term chart.

Cowen also found it noteworthy that Bitcoin rose despite the strengthening dollar, saying that under normal circumstances he would expect a rise in the dollar index to put pressure on Bitcoin, but this did not happen. According to Cowen, the market may continue to behave differently than macroeconomic indicators imply.

*This is not investment advice.