Cryptocurrency Analyst Warns of Potential Bitcoin Bearish Trends

Cryptocurrency analyst Benjamin Cowen is cautioning that Bitcoin (BTC) could face a bearish trend based on historical indicators.

In a recent strategy session, Cowen informed his 887,000 YouTube subscribers that the Relative Strength Index (RSI) on Bitcoin’s weekly time frame is currently at a support level that has previously indicated the end of a cycle whenever it breaks down.

The RSI is a momentum oscillator that ranges from zero to 100, used to assess overbought or oversold conditions. A reading above 70 indicates overbought conditions, while a reading below 30 indicates oversold conditions.

> “Structurally, there’s been no denying there have been similarities between this cycle and the 2016-2017 cycle. There’s sort of a weekly RSI support level that Bitcoin continues to try to hold support at. If it breaks, it’s possible that it means the cycle is over.”

Cowen’s analysis indicates that Bitcoin’s weekly RSI support is around 44. As of the time of writing, Bitcoin is trading at $86,096 with a weekly RSI around 50.

Cowen elaborates that if Bitcoin loses the RSI support level on the weekly timeframe, it may suggest underlying issues within the US economy, prompting the Federal Reserve to intervene and loosen monetary policy.

> “If the weekly RSI breaks down below 44, then I think you really start to argue you’re going more so into the monetary policy view where the Fed’s going to try to come to the rescue at some point, and hopefully they haven’t done too much damage to sort of repair things.”

He notes that the current inflation scenario makes the Fed less likely to support markets as quickly as they did in the past, emphasizing the necessity for inflation to stabilize before further intervention occurs.