Benjamin Cowen Says BTC Falls to the Bull Market Support Band

Crypto analyst Benjamin Cowen highlights in his technical savvy youtube video that Bitcoin (BTC) has reached its 20-week moving average, bringing price action directly into the bull market support band after testing levels near $73.5K.

Cowen’s Key Technical Findings

1. Bull Market Support Band Test: He said, Bitcoin dropped to $73.5K, tagging the 20-week moving average. This follows a pattern seen across other major assets like the NASDAQ, S&P 500, Ethereum, and market cap metrics like Total 2 and Total 3, which had already reached their respective support bands.
2. Stair-Stepping Price Action: Historical trends show Bitcoin initially  tagging the 21-week EMA, experiencing a brief bounce, and then falling toward the 20-week SMA. Cowen further noted that the current structure resembles a downward headed stair-step pattern on notable market panic, bouncing back on re-buys, and then continuing downwards. To be simply put, it’s making a lower-high and lower-low price structure.
3. Loss of 50-Week Moving Average: On the weekly chart, Bitcoin closed back below its 50-week moving average. Unlike historical breakout rallies that happened in 2019 and 2023 that surged immediately after clearing this level, the recent attempt failed to gain momentum beyond 10% before reversing.

Cowen Tells About Macro Outlook & Historical Cycles

1. Midterm Year Weakness: Historically, the fourth quarter of midterm election years tends to bring a window of macro weakness across equity and crypto markets, often leading to a larger capitulation event.
2. Correlation with Equities: The drop in Bitcoin aligns with ongoing corrections in traditional markets like the NASDAQ. Cowen warns that periods where Bitcoin appears to hold up well during stock market pullbacks often precede a subsequent leg down.
3. Liquidity Drain from Tech IPOs: Market liquidity is also facing pressure as investors sell liquid crypto assets to reallocate capital into high profile private offerings such as Anthropic and SpaceX.

Looking Ahead to Rest of Q4

Cowen maintains a cyclic base case of key lows occurring in February, summer, and late Q4.

Historical patterns following the first interest rate hike of a cycle suggest potential market bottoms around day 94, pointing toward mid December, a timeline that closely coincides with upcoming Federal Reserve rate decision meetings. 

Until macro conditions stabilize, Cowen expects Bitcoin to potentially break below the bull market support band as the market continues its search for a definitive Q4 low.