Benjamin Cowen Updates Bitcoin Price Forecast, Says Fed Rate Cuts Not As Bullish as Market Expects

Crypto analyst Benjamin Cowen is updating his outlook on Bitcoin (BTC) as buyers start to anticipate the likelihood that the Federal Reserve will reverse its tight financial insurance policies within the coming months.

In a brand new technique session, Cowen tells his 789,000 YouTube subscribers that when the Fed begins chopping charges, which CME’s FedWatch Instrument indicates is prone to occur as early as March, threat property like Bitcoin may very well decline in worth.

“As charge cuts arrive it’s usually not essentially the most bullish factor for threat property, not as a result of charge cuts in and of themselves aren’t bullish, however as a result of a charge lower in and of itself is theoretically bullish.

However the issue shouldn’t be the speed lower itself. It’s why the speed lower is going on. And on this cycle, much more so given the place inflation is, you’d should think about that if a charge lower have been to reach with inflation as excessive as it’s, there’s in all probability a motive that that’s occurring. Final cycle, we did get kind of a [Bitcoin] mid-cycle prime [in September 2019] proper across the time that charge cuts arrived…

In the event you take a look at issues just like the S&P 500 or threat property on the whole, generally they prime out properly earlier than charge cuts arrive. Typically they prime out a bit of bit after they arrive, however usually, charge cuts arriving haven’t been an amazing factor for threat property, at the very least over the brief time period. When it turns into an excellent factor for threat property is when you get to the final charge lower… As a result of when you get to the final charge lower, it mainly implies the market thinks the Fed has carried out sufficient and that they’ve gone again to sufficiently looser financial coverage to get the financial system again on observe.”

Cowen additionally warns that Bitcoin could dip to check ranges throughout the bull market assist band, which is fashioned by the 20-week easy shifting common (SMA) and the 21-week exponential shifting common (EMA).

Says Cowen,

“I feel it’s worthwhile to keep watch over the eight-week shifting common this week. Once more, it’s at present round $42,300, which is true across the present value. If we get beneath it, there’s an excellent probability we’re going to check the bull market assist band, which is all the way in which down at $35,000 to $37,000. Simply take into consideration $36,000 or so is the place it’s, which, by the way in which, from the present value would symbolize a drop of roughly 13% to get again to the 21-week EMA and a few 16%-17% drop to get again to the 20-week SMA…

It is a sample that we’ve seen lots.”

Bitcoin is buying and selling for $42,704 at time of writing.

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