Crypto analyst Benjamin Cowen is raising concerns about Bitcoin’s future. He’s looking at a specific indicator – the Relative Strength Index (RSI) – to predict the market’s next move.
The RSI and Bitcoin’s History
Cowen, who boasts a massive YouTube following, points to the weekly RSI for Bitcoin. This indicator, ranging from 0 to 100, helps gauge market momentum. Readings above 70 suggest the market is overbought, while readings below 30 indicate it’s oversold. Cowen notes that historically, when the weekly RSI for Bitcoin breaks a certain support level, it signals the end of a bull cycle.
A Key Support Level
According to Cowen’s analysis, Bitcoin’s weekly RSI has a support level around 44. Currently, it’s hovering around 50. If it drops below 44, Cowen believes it could be a major warning sign.
The Economy and the Fed
Cowen connects a potential Bitcoin downturn to the US economy and the Federal Reserve’s actions. He suggests that a breakdown in the RSI could indicate deeper economic problems, forcing the Fed to intervene with looser monetary policy. However, he cautions that the Fed might be hesitant to act as quickly as before due to current inflationary concerns. They might wait until inflation shows clear signs of decreasing before stepping in to support the markets.
Disclaimer: This information is for general knowledge and shouldn’t be considered investment advice. Always do your own research before making any investment decisions.
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