Is Bitcoin Approaching a Mid-Cycle Downturn? Insights from Benjamin Cowen

Hey crypto enthusiasts! Benjamin Cowen, the go-to guy for crypto analysis, just dropped some interesting thoughts on Bitcoin’s current situation. Hold on to your hats because there might be a storm brewing.

In his latest chat with the 789,000-strong YouTube crew, Cowen dives into the charts, and what he sees is intriguing. The 20-week simple moving average (SMA) is doing a little dance, and it’s signaling some bearish vibes for Bitcoin. Yup, you heard it right – a potential mid-cycle top might be on the horizon.

Reading the Signs: 20-Week SMA and Bitcoin’s Dance

Cowen breaks it down by pointing out that historically, the last three times Bitcoin hit a local top, it was around the same time the 20-week SMA was about 40% extended. According to him, that’s a red flag worth keeping an eye on.

But let’s zoom out for a moment. Cowen takes a broader view, explaining that Bitcoin tends to shout “top of the cycle” when the extension from the 20-week SMA meets its diagonal resistance. To make it more tangible, he throws in a chart from the archives.

Deja Vu? Bitcoin’s 2019 Mid-Cycle Top and What it Might Mean Now

In 2019, when Bitcoin was doing its thing, the 20-week SMA was cozying up to its diagonal resistance, and lo and behold – a mid-cycle top happened. Cowen suggests we might be in for a repeat performance. He points out how the current extension from the 20-week SMA is hanging out in the neighborhood of that long-term diagonal resistance.

Taking a stroll down memory lane, Cowen reminisces about the good ol’ days of peak bull mania. He notes that in the earlier cycles, the extension from the 20-week SMA was more dramatic. However, as time went on, the excitement seemed to dwindle. Now, the burning question is, will history repeat itself in this cycle?

Cowen throws in a curveball by mentioning the mid-cycle top in 2019, where the indicator didn’t quite hit the mark. It came close, but no cigar. He emphasizes that the peak extensions, when they do happen, often lead to significant tops, like those glorious all-time highs. So, is the current situation a mid-cycle top, akin to the one in June 2019, or are we witnessing something different in January 2024?

And there you have it, crypto fans – the charts are talking, and Benjamin Cowen is decoding. Bitcoin is currently cruising at $39,365, catching a breather in the last 24 hours. Stay tuned as the crypto saga unfolds!