In a recent video update, popular crypto analyst Benjamin Cowen suggests that Bitcoin (BTC) may be mimicking the behavior of the stock market, but with greater volatility. Cowen points out that the Russell 2000 Index, NASDAQ, and S&P 500 all experienced a rise to their 50-day simple moving average (SMA) before a pullback. He speculates that BTC may follow a similar pattern, reaching its 50-day SMA before another sell-off occurs.
Cowen highlights the recent performance of the S&P, NASDAQ, and Russell, which all closed just below their 50-day moving average. Previously, these indexes were at their bull market support band, while Bitcoin was not. If Bitcoin is indeed a more volatile version of the stock market, Cowen suggests that it would likely experience a correction similar to the S&P, NASDAQ, and Russell, which recently returned to their 50-day moving average.
The question then arises: where is the 50-day moving average for Bitcoin? Cowen estimates it to be around $66,000. If Bitcoin fails to reach this level, it could indicate weakness in the crypto market. However, if it does reach this level, it would provide further evidence of Bitcoin’s correlation to the stock market, possibly even with a delay.
Yesterday, BTC reached a high of $65,520, but at the time of writing, it is trading at $63,711. It is important for investors to conduct their own research and exercise caution when making high-risk investments in Bitcoin or other cryptocurrencies. The Daily Hodl, where this information was sourced from, does not offer investment advice and is not an investment advisor.
