A widely followed crypto analyst says that one indicator could mean a Bitcoin (BTC) correction is coming soon.
In a new strategy session, crypto trader Benjamin Cowen tells his 788,000 YouTube subscribers that BTC flashed a golden cross, which has signaled an imminent price decline in the past.
A golden cross, which is generally viewed as a bullish signal, occurs when an asset’s 50-day moving average (MA) crosses over its 200-day moving average. It is the opposite of a death cross.
Cowen says that while bulls take notice when an asset flashes a golden cross, Bitcoin has historically pulled back after witnessing the signal.
“The death cross, which tends to make headlines, tells you what already happened. It already tells you that the price went down.
And then people sell on that headline and then the price goes up. Coincidentally, we just had a golden cross, where the 50-day has crossed above the 200-day. And what history tends to show us after a golden cross is that you normally go down first.
That doesn’t mean that it has to happen. There are periods in history where after a death cross price goes down or after a golden cross price goes up. But just like we talked about the death cross and how price normally goes up after a death cross in the short term, I want to at least mention that we now have a golden cross, but it doesn’t necessarily mean anything.
It tells you what you already know, the price went up a lot and that’s why the shorter-term moving average is above the longer-term moving average.
And the last time we had a golden cross was back over here in February, and after that golden cross, you can see that price dropped about 8% or 9% or so. For reference, an 8% or 9% drop from these levels would put Bitcoin at around $31,000 or so.”
According to Cowen, he is closely watching whether Bitcoin can hold $31,000 as support if BTC trends down.
“I think the bigger thing is if and when Bitcoin gets a pullback, assuming it will at some point, this area [at the $31,000 level] will of course be what everyone’s watching. Does this zone turn into support? You break out of a range does it turn into support or is it more just a sort of a deviation outside of it to only come back in? And so I think that’s what a lot of people will be watching.”
Bitcoin is trading for $34,478 at time of writing.
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The post Contrarian Indicator Suggesting Bitcoin (BTC) Ready for Large Correction, According to Analyst Benjamin Cowen appeared first on The Daily Hodl.
