Bitcoin (BTC) has been on a downward trend for the past two weeks, but it has shown signs of recovery this week, rising to a weekly high of $40,900. Bitcoin recently witnessed a significant drop, erasing 50% of its gains from its all-time high of $64,000 and is hovering around $38000, as it is struggling to reclaim the $40000 mark. At the time of writing Bitcoin was trading at $34,573.27.
According to Benjamin Cowen, he is bullish on the largest crypto asset, but he also comes with a warning that there may be unfavorable price actions in the near future, so investors should be well prepared
He went on to say that if the investors are not doing themselves any favor if they are not even considering the bearish scenario in the near future. Keeping the bearish outcomes in mind and moving forward is something he suggests. If anything, considering bearish scenarios helps the investors capitalize on it and if it really does he says, go very bearish.
In simpler words, he means that if you’re prepared enough for the worst-case scenario then it comes with a cherry on the cake. It only means that here we are able to take advantage of a prime entry point.
He asks, “Are you prepared to take advantage of that move if you operate deterministically? and say “We will not see $20,000 again,” and then what if you do? Or did you go all-in at $60,000 because everyone told you it was going to $300,000 by the end of the year?
Allowing yourself to think about the negative risk helps you to keep some stablecoins on the sidelines of DCA (dollar cost average) into the market if things turn bearish.
The widely respected analyst identifies five critical Bitcoin levels to watch, beginning with the 50-week moving average, which is currently around $28,253 at the time of writing.
According to Benjamin Cowen,
“Looking at the 50-week [moving average], this could be an area to look at. That right there might be the first area to look at it in the event of a sustained correction. And if we keep coming down, I’m curious how people are going to say that that is still a bull market. I mean, if you’re going down 50-60% you’re definitely having some change in market sentiment…But the 100-week is even further down at $18,500 and the 200-week is even further down. I don’t think we’re going to these prices at $12,000 or $13,000. These things can happen where we come down and then continue our run and then we get a consolidation phase…I would argue we’re already in this consolidation phase or reaccumulation phase.”