Bitcoin Matches All Past Bear Market Bottom Patterns Says Analyst

Bitcoin has now matched the pattern observed in every past bear market bottom, according to Benjamin Cowen, a well-known crypto analyst. Cowen, founder of Into The Cryptoverse, outlined the typical three-step recovery during a Real Vision interview: a price low followed by a rally, climbing above the 20-week moving average, and breaking the 50-week moving average. Bitcoin has completed all three steps, and Cowen admits he cannot recall a similar setup that failed. Even though Silver’s 2011 breakout reversed the next day, Bitcoin has held its gains so far, shifting the burden of proof to the bears.

Cowen had previously bet that Bitcoin would stay below its May high this year, but the rally past that level proved him wrong. He chose to admit his mistake rather than argue against the breakout. Cowen initially misjudged the impact of Fed rate hikes, assuming they would push Bitcoin lower. However, he now acknowledges that rate hikes can also signal a healthy economy, which might support Bitcoin.

The main threat to Bitcoin’s rally, according to Cowen, is a potential stock market correction. Historically, stocks have begun sliding in late September during midterm years, which could drag crypto lower. However, Cowen does not expect a retreat from the $85,000 to $90,000 range to produce a new cycle low, as Bitcoin would still remain above its prior bottom. This cycle’s low came in July, earlier than usual.

Cowen also predicts that the 10-year Treasury yield, currently at 5.3%, will likely peak before mid-November, as it did in the last two midterm years. The odds of an October Fed hike have dropped from 64% to 17.7% in a week, suggesting bond traders are concerned about the Fed falling behind on inflation. For crypto, falling yields could ease pressure on risk assets and provide more room for Bitcoin’s rally to continue.