Benjamin Cowen|25. Mai
Bitcoin: Bear Market Resistance Band
đ Current Market Situation & Focus on Bear Market Resistance Band
- Bitcoin is trading around $77,000.
- The focus is on the Bear Market Resistance Band and typical weakness windows in so-called âmidterm yearsâ (years after the halving: 2014, 2018, 2022, 2026).
- February: Occurs as a significant weakness window in every midterm year (e.g., February 2014, 2018, 2022).
- Late March / Early April: Another window; in 2018, a higher low formed here.
- June: The most important weakness window. In 2014, 2018, and 2022, June saw either a low or a significant decline.
- Scenario (Low in June): Since Bitcoin has fallen over the last two weeks, the probability of a low forming in June is increasing. This also happened in 2018 (lower low) and 2022 (much lower low).
- Scenario (Similar to 2014): Should Bitcoin rally again after the current decline, it could follow the 2014 pattern, where the price remained relatively stable until July before falling in August.
- Historically, Bitcoin has been rejected at the resistance band in bear markets. This happened in 2018, 2014, and also in 2022 (when Bitcoin fell back below it after briefly crossing above).
- Bitcoin vs. S&P 500: Bitcoinâs valuation relative to the S&P 500 was also rejected at the Bear Market Resistance Band (here: 20-week SMA/21-week EMA). The analyst expects Bitcoin to underperform the S&P 500 for a few more months.
- Macroeconomic Headwinds:
- The market is increasingly pricing in rate hikes, which is negative for cryptocurrencies.
- Rising energy prices (oil) and geopolitical tensions could amplify this trend.
- Crypto is more dependent on monetary policy, while the stock market benefits from corporate earnings (e.g., AI stocks).
- Expectation: A retest of the low at $60,000 within the next few months is likely. The current behavior (a rally in February, followed by another decline) resembles a bear market rally more than the start of a new bull market.
- Timeline: Historically, it takes about 20 weeks from one low to the next. We are in week 16. A low by late June (around June 17, the next Fed meeting and Bank of Japan meeting) would be typical.
- Counterargument: The strong stock market (especially AI) is not a strong argument, as Bitcoin has fallen despite rising stock prices.
The crypto analyst maintains his medium-term bearish view but does not expect a crash to $10,000. He sees a high probability of a decline towards $60,000, before the situation could improve again later this year or in 2024.
