Bitcoin just took a tumble, falling below $54,000 and its key 200-day average! This sudden dip comes as two major events shake the crypto market: Mt. Gox is finally returning funds to creditors, and the German government is unloading its seized Bitcoin.
As Bitcoin enters its expected summer lull, renowned crypto analyst Benjamin Cowen has highlighted this period of stagnation. Cowen has frequently discussed Bitcoin’s summer slowdown, a time when its price tends to dip or remain static.
Now that this period has arrived, he is turning his attention to the potential market trends for the rest of the year.
The critical question is whether Bitcoin can climb back above its Bull Market Support Band (BMSB) in the coming weeks or if it will continue to face resistance. In a recent thread, Cowen noted that Bitcoin is currently falling below its BMSB during the summer of 2024. This pattern isn’t new; similar trends have been observed in previous years.
For instance, in August 2023, Bitcoin dipped below its BMSB, lingered there for a few weeks, and then experienced a robust rally in Q4.
In 2013, Bitcoin hit a low in early July but quickly rebounded above the 21-week EMA, leading to a significant rally in Q4. Conversely, in 2019, Bitcoin’s summer decline persisted below the BMSB after the Federal Reserve cut interest rates, resulting in further drops in Q4.
Cowen also draws parallels between Bitcoin’s current performance and its post-halving period in 2016. This similarity suggests that we might witness comparable trends this time around. Historically, Bitcoin tends to peak in Q4 of the post-halving year, which for the current cycle would be 2025.
Several key factors will influence Bitcoin’s future movements:
According to Cowen, Bitcoin’s fate in Q4 2024 hinges on whether it can reclaim its position above the BMSB. If it follows the patterns of 2013, 2016, and 2023, a strong recovery and rally could be on the horizon. However, if it mirrors the trend of 2019, Bitcoin might continue to struggle.
As we navigate through the summer slowdown, all eyes will be on Bitcoin’s ability to break through its current resistance and the various factors that will shape its journey in the coming months.
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