Bitcoin’s Fate Hinges on Holding $62,000 Amid Death Cross Warning, Says Analyst Benjamin Cowen
Crypto analyst Benjamin Cowen recently delved into the implications of the death cross indicator, which has resurfaced on Bitcoin’s chart. This indicator highlights the importance of the $62,000 price level in preventing another Bitcoin crash.
In a video posted on his YouTube channel, Cowen emphasized that Bitcoin could face a significant drop if it does not maintain its position above $62,000 as the death cross approaches. After rebounding from a crash below $50,000 on August 5, Bitcoin surged to $62,000. However, this rise has brought about the death cross, now threatening lower prices for the leading cryptocurrency.
The Death Cross and Its Impact on Bitcoin’s Price
The death cross indicator is generally seen as bearish, signaling potential prolonged price declines. This occurs when the 50-day moving average falls below the 200-day moving average. According to Cowen, Bitcoin’s 50-day moving average is currently around $62,000. Therefore, Bitcoin must reclaim and sustain this level soon, or it risks further declines, possibly dropping below the psychological $60,000 mark.
Cowen compared the current scenario to the death cross of 2019, which marked a local top for Bitcoin, followed by lower highs and a bearish trend for about four months. He acknowledged that while historical patterns offer insights, each cycle can play out differently, with indicators behaving in slightly varied ways.
The timing of this death cross could be critical, as September has historically been Bitcoin’s worst month, hinting at a potential downtrend extending into this period.
Macro Factors at Play
Cowen pointed out that Bitcoin’s next move will largely depend on external macroeconomic factors rather than internal market conditions. These include inflation, the labor market, and recession fears, which contributed to the August 5 crash.
The US Federal Reserve has refrained from cutting interest rates to curb inflation, aiming for a 2% target. This hesitation has sparked concerns about an impending recession. Additionally, July’s US job reports revealed higher-than-expected unemployment rates, further fueling these fears.
Macroeconomic conditions significantly influence Bitcoin and the broader crypto market, determining investors’ willingness to invest in these risk assets.