Popular crypto trader and analyst Benjamin Cowen says Bitcoin could face a few months of bearish price action if it fails to stay above a key metric.
BTC is trading at $46,143 at time of writing, down sharply from its weekly high of $52,774 after plunging on Tuesday, according to CoinGecko.
However, the largest crypto asset by market cap is still trading above its 20-week simple moving average (SMA), says Cowen.
“On some exchanges, we had a wick right down to the 20-week moving average… so clearly some people are wanting to hold the line at the 20-week moving average and are hoping that it holds as support so that we can have the confidence to ultimately push to $100,000. Now remember, these moves to the 20-week are par for the course in a bull market.”
The analyst tells his 532,000 YouTube subscribers that Bitcoin will probably need to hold the 20-week SMA in order to have a sustained rally for the next several months. If BTC closes two consecutive weeks below the 20-week SMA, Cowen says it likely will enter a three-month bear market before turning bullish again in 2022.
“Even in a bull market that should take us to $100k, going to the 20-week moving average is something that happens a lot of times, and if we don’t hold it, I think we just kick the can down the road, and then we’ll hold it in a few months.
The 20-week SMA again now is coming in just over $42,000.”