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Cryptocurrency News Articles
Gold's Rise Sounds Alarm: Crypto Analyst Warns of Potential Bitcoin Peak
Apr 28, 2024 at 07:45 pm
According to crypto analyst Benjamin Cowen, the recent strength of Bitcoin (BTC) may have reached a local peak as indicated by the positive performance of gold. If gold continues to perform well, BTC may experience an extended correction. Additionally, the breakdown of Ethereum (ETH) against BTC (ETH/BTC) often correlates with BTC price corrections, which has potentially begun. While altcoins bleeding out against BTC is another potential sign of a BTC top, it has not occurred yet this time. Cowen suggests that BTC may fluctuate between $66,000 and $56,000 before making a significant move.
Crypto Analyst Raises Alarm: Gold's Rise Signals a Potential Bitcoin Peak
Renowned crypto analyst Benjamin Cowen is sounding the alarm, suggesting that the recent surge in gold prices may have heralded the impending peak of Bitcoin's (BTC) recent rally. In a comprehensive video update, Cowen presented compelling evidence that, if gold continues its upward trajectory, the leading cryptocurrency by market capitalization could be poised for a protracted correction.
Gold's Significance as a Market Signal
Cowen highlighted a striking historical correlation between gold breakouts and Bitcoin market tops. In 2019, for instance, the breakout of gold coincided with the local peak of Bitcoin. While Bitcoin experienced a subsequent upward trajectory a year later, Cowen observed that gold's breakout in 2023 coincided with the local peak of Bitcoin/USD in March.
This observation suggests that if gold maintains its bullish momentum, it could potentially signal a downturn for Bitcoin, defying last year's price surge following a similar consolidation below the 8-week moving average.
Ethereum's Breakout and the Potential for Correlation
Cowen's analysis extends to the breakdown of Ethereum (ETH) against BTC (ETH/BTC), which has also historically correlated with Bitcoin peaks. He noted that this potential trend has already begun to manifest.
"The other thing that has already happened is the ETH/BTC breakdown," Cowen explained. "So if you look at the breakdown of ETH/BTC, you can see that last cycle, once it started to break down, that marked the top by BTC/USD before a larger correction, and you're kind of looking at something similar [this year]."
At the time of writing, ETH/BTC was trading at 0.05143 ($3,258).
Altcoins' Performance as an Indicator of Bitcoin's Trend
Cowen further emphasized that a decline in altcoins' value relative to Bitcoin would be another telltale sign of a Bitcoin peak. However, this phenomenon has not yet occurred during the current market cycle.
"When [altcoins] broke down [last cycle], that marked the local top for Bitcoin," Cowen stated. "And Bitcoin still got some pretty nice rallies as altcoins bled against Bitcoin. That hasn't happened yet. Altcoins did get a lick below it but not durable weekly closes below it."
Bitcoin's Near-Term Prospects
Based on his analysis, Cowen cautiously predicts that Bitcoin will continue to fluctuate within a range between $66,000 and $56,000 in the coming weeks. He anticipates that the cryptocurrency will spend a significant amount of time between the 8-week SMA and the bull market support band.
At the time of writing, Bitcoin was trading at $63,386, representing a 1.2% decline over the previous 24 hours. It is worth noting that Bitcoin was trading at around $44,000 at the beginning of 2023.
Conclusion
Benjamin Cowen's detailed analysis suggests that gold's recent rally could be a harbinger of a potential peak in Bitcoin's current upward momentum. While it remains to be seen whether this prediction will hold true, investors are advised to monitor market developments closely for any signs of a reversal in Bitcoin's trend.
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