Benjamin Cowen, a crypto analyst with a large YouTube following, is raising concerns that Bitcoin might be heading for a downturn similar to what happened in 2019. He shared with his 788,000 subscribers that the current Bitcoin price pattern mirrors the one from 2019, which led to a significant correction.
Cowen explains that if Bitcoin replicates a specific candlestick pattern – an engulfing candle that reverses the previous week’s losses – we could be looking at a downturn similar to mid-2019, just before the Federal Reserve’s first rate cut. He’s keeping an eye on whether this pattern will unfold the same way or take a different turn.
Looking back, Bitcoin’s value dropped from around $13,000 to $9,167 after exhibiting this pattern in 2019. Additionally, it plummeted below $4,000 when the interest rates were at their lowest that year.
Cowen also points out that, in 2019, Bitcoin reached a local peak about a month before the Fed cut rates. He mentions that some are anticipating a Fed rate cut as early as January, while others predict it in March. He highlights the correlation between Bitcoin’s peak and the timing of the Fed’s rate cut, noting that in 2019, Bitcoin’s value topped out about a month before the cut.
With the future of the Federal Reserve’s rate cuts hinging on the evolving labor market, Cowen suggests that the timing and impact on Bitcoin’s value remain uncertain.
Bitcoin is trading for $42,524 at time of writing, down 2.4% in the last 24 hours.