In a video update, crypto analyst Benjamin Cowen warns Bitcoin bulls and bears that they are about to experience a fakeout. Cowen explains that during the pre-halving year, both sides tend to get “wrecked” by a fake “death cross.” The death cross occurs when an asset’s 50-day moving average falls below its 200-day moving average, indicating a potential bearish phase. He cautions traders and investors against selling into the death cross, as these indicators are lagging and often lead to the opposite outcome in the short term. Cowen also predicts that Bitcoin will enter a downtrend for the rest of the year due to the seasonal correction of the S&P 500 during pre-election years.
According to Cowen, the reason for the destruction of both bulls and bears is the occurrence of a death cross that tricks traders and investors. He emphasizes that golden crosses and death crosses are lagging indicators based on moving averages, leading people to sell into the death cross. However, he explains that these indicators often produce the opposite outcome in the short term. Cowen also mentions the seasonal correction of the S&P 500 during pre-election years, which tends to trigger a downtrend for Bitcoin regardless of the movement of the stock market index.
Despite a fractional increase in the last 24 hours, Bitcoin is currently trading at $27,031. Cowen’s analysis suggests that both bulls and bears should expect a challenging year ahead, with potential losses as a result of the upcoming death cross and the seasonal correction of the S&P 500.